The test of a well-functioning housing system is the wellbeing of its occupants. It may therefore seem encouraging that in jurisdictions dominated by mortgage-backed home ownership, owner-occupiers traditionally report better physical and mental health than renters. During the 2000s, however, in an era of financial crisis, wellbeing at the edges of ownership came under strain. Using data from two national panel surveys – the survey of Household, Income and Labour Dynamics in Australia, and the British Household Panel Survey (with its successor, Understanding Society) – we track the wellbeing of households who sustained one or more spells of home ownership in the decade to 2010. We estimate log-log regression models of mental wellbeing for each country, documenting (with an appropriate range of controls) the effects of both tenure transitions (between ownership and renting) and some associated financial transactions (anchored on mortgage debt). We find: a wellbeing premium associated with outright ownership and a debt-effect among mortgagors; a wellbeing deficit among those who drop out of owner-occupation, with partial recovery where exit is enduring; and for leavers especially, a wellbeing cost to equity borrowing. Cross-national differences have an institutional explanation, but similarities relating to the character and regulation of mortgage markets are more striking.@en

In many Western countries the edges of ownership form a neglected zone between the majority tenure, sustainable owner-occupation, and the minority experience, long-term renting. In these tenure-divided societies, it is surprising that so little attention has been paid to the zone of transition between styles of accommodation, not least because the edges of ownership are now so precarious. The six papers included in this special issue advance empirical and conceptual understandings of these neglected zones, showing how, increasingly, they compromise the sustainability of housing solutions. Some approach this by developing an understanding of how the changing fungibility of housing wealth has transformed its welfare role, while at the same time exposing those on the edges of ownership to heightened levels of risk. A second set of papers report from a variety of jurisdictions to show how the structure of the edges of owner-occupation vary across cultures and countries, and change over time.@en

Housing wealth dominates the asset portfolios of the older population in Australia and many other countries. Given the anticipated spike in fiscal costs associated with population ageing, there is growing policy interest in housing equity withdrawal (HEW) to finance living needs in retirement. This paper sheds light on homeowners’ perceptions of the obstacles associated with two forms of HEW: mortgage equity withdrawal (where the in situ home owner increases his/her housing-related debt) and downsizing (where housing equity is released by moving to a lower-valued property). We uncover a series of age-specific barriers impeding older Australians’ use of these forms of HEW through qualitative analysis of semi-structured interviews conducted with home owners and professional service providers in related areas of policy and practice. To that end, we recommend the development of a range of safeguards that will minimise the risk exposure and other obstacles associated with HEW for older home owners.

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Australian home owners and investors benefit from various tax concessions. Home owner tax concessions are poorly targeted with older, higher income households the main beneficiaries. There could also be efficiency consequences if the tax favoured owner-occupied housing sector attracts investment that would otherwise have been employed more productively elsewhere. Investors can use negative gearing to convert ordinary income into capital gains that are taxed leniently. These tax benefits distort the supply of rental housing to the detriment of affordable rental housing opportunities. To address some of these concerns, the paper examines a potential tax reform package that would replace stamp duty by a uniform flat rate land tax. Using Victorian Valuer-General property data, we estimate the land tax liabilities that property owners would be asked to pay if a revenue neutral broad-based land tax replaced stamp duty on conveyance. We describe these land tax burdens if hypothetically levied in Melbourne as of 2005–2006, and compare the new tax burdens with liabilities under existing stamp duty provisions. The strong efficiency case in favour of such a tax substitution is complemented by empirical findings which suggest that higher income communities shoulder higher land tax burdens.@en

This paper focuses on two countries with debt-funded ownership-centred housing systems, Australia and the UK. Financially, there are similarities between these two societies, which have relatively ‘complete’, reasonably well-regulated mortgage markets, had limited exposure to the extremes of subprime, and have been pre-occupied with (and reasonably successful in) restoring ‘business as usual’ in housing and mortgage markets. Institutionally, however, the countries differ from each other, notably with respect to the size and function of the rented sectors. By modelling matched datasets from panel surveys in Australia and the UK, this paper considers how home-buying households in these financially similar, institutionally distinct, countries coped with the ups and downs of housing and mortgage markets in the first decade of the millennium. To address this, we focus on the edges of ownership: that once-stark boundary between owning and renting whose character is often taken for granted, yet which contains important signals about the functioning of housing systems, their link to the wider economy and the well-being of home occupiers. The analysis considers in hitherto unprecedented empirical detail how, why, when, for whom and in what way the edges of ownership proved precarious in the decade to 2010.@en