How other nations reveal Australia’s housing dream is fundamentally broken

Australia’s struggle to hold onto the dwindling Australian dream stands in stark contrast to other nations that have built housing systems entirely differently.

The stranglehold the Australian Dream has on the nation’s society is placing immense pressure as more generations struggle to purchase their own home.

Australia’s combined ownership rate is 62.7 per cent, according to data from the OECD (Organisation for Economic Co-operation and Development), while the Roy Morgan research shows that 23.9 per cent of mortgage holders were ‘At Risk’ of mortgage stress, and 15 per cent were ranked ‘Extremely At Risk.’

The Australian dream of owning a home is statistically stable, in reality it is harder than ever to achieve and many Aussies have already given the dream a flick in search of a new one as the rate of ownership continues to drop.

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Ray White Group economist Atom Go Tian has analysed whether Australians should give up on the Australian dream and look to other countries for inspiration of how Aussies can rewire their idea of property, ownership and home security.

“For most of the twentieth century, homeownership was a social contract available to most in the form of affordable land, accessible credit, a pathway achievable within a reasonable working life,” Mr Go Tian said.

“As house prices have climbed, the path from renter to mortgaged owner to outright owner has elongated dramatically.”

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Australia sits in the middle alongside New Zealand, Canada, the UK, and the US. These markets are the “homeownership dream” cluster, yet within that shared dream are differences worth learning from.

So how does Australia’s housing system compared to overseas?

Western Europe

Western European countries like Switzerland, Netherlands, Denmark and Germany have built their housing dream in the opposite way, with between 55-51 per cent of their population renting.

“(These countries) build their housing systems around renting as a legitimate, long-term stable life choice, not a way station to buying,” he said.

“Not a failure of aspiration but the result of strong tenant protection laws, professionally managed rental stock, historically rent-controlled urban housing, and a deliberate post-war policy decision not to subsidise owner-occupation the way the UK or US did.”

Japan

Japan offers the most radical alternative, according to Mr Go Tian, where residential

buildings depreciate to near zero within 30 years, stripping housing of its wealth-storage function entirely.

“Because houses depreciate rather than appreciate, Japan builds continuously. In Tokyo, more housing permits are issued annually than in the entire state of California, yet rents have stayed flat for decades.

“Without capital gain expectations, there is no political constituency for restricting supply,” he said.

USA

“The United States is the most instructive divergence,” Mr Go Tian said.

“While Australia’s outright ownership rate has drifted downward, America’s has climbed steadily from 21.5 to 26 per cent over the same period,”

With access to 30-year fixed-rate mortgage, US borrowers lock into a rate for the life of their loan, converting debt into equity on a predictable schedule.

Australia’s variable-rate mortgage culture works in reverse, every rate rise hits every borrower immediately, and low rates historically encouraged equity extraction rather than paydown.

UK

The United Kingdom offers a different lesson, Mr Go Tian added.

“Rather than building a private rental market, Britain bifurcated: you either owned or you were housed by the state.

“As Right to Buy policies sold off council stock from the 1980s onward and ownership became unaffordable for a new generation, there was no adequate private rental sector to absorb the overflow,” he said.

“The UK’s housing crisis is in part the cost of never having built one.”

Canada and New Zealand

Canada and New Zealand mirror Australia most closely: high mortgage dependence, negligible social housing, and a private rental sector that expanded not by design but by default, claims Mr Go Tian.

“Demand-side interventions like first-home buyer grants and Help-to-Buy schemes temporarily boost individual access but inflate prices, benefiting existing owners and undermining their own goals,” he said.

“The single most transferable lesson from the OECD data is that countries with functioning housing systems, whether ownership-based like the US or rental-based like Germany, built them through deliberate, tenure-neutral policy sustained over time.

“The idea of a quarter-acre block may have shrunk, but the dream of a home you can call your own does not have to.”

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