What drives housing outcomes in Australia? Understanding the role of aspirations, household formation, economic incentives and labour market interactions:positioning paper

The sequence of housing stages that an individual moves through over their lifetime forms the 'housing career' of that individual.1 While each housing career follows a unique path, a set of general forces act to influence the overall direction taken by individual housing careers. Key among these are the following five determinants: (a) Housing tenure preferences and housing market trends (house prices, rents etc.); (b) Household formation aspirations and outcomes; (c) Labour market effects (wages, employment, unemployment, and retirement); (d) Lifetime wealth accumulation objectives, and, (e) Housing assistance, income support, tax, and welfare programs. In this project, we map out how these (and other) drivers influence the trajectory of Australian housing careers. We focus attention on three distinct stages: (1) Early adulthood when the first, independent housing career transitions are made (ages 15-34); (2) the middle age stage (ages 35-49); and (3) The mature phase of the life cycle (ages 50-69). Our aim in this project is to increase our understanding of what drives housing outcomes in Australia and what determines the structure of Australian housing careers. The project also has an important policy objective: To illustrate how the output from a formal modelling of housing careers can be used in the development of an evidence-based housing policy. The project aims to shed light on how a range of specific government policy actions (e.g., rent assistance programs, public housing programs, etc.) impact on the direction taken by Australians in their housing careers.