3 common myths about the great Australian property dream dispelled

Updated: Jul 9, 2020

Australia is a young country still finding its place in the world. National identity is largely built on a number of myths, which unsurprisingly for a property obsessed country, largely seem to hinge on the ‘great Australian dream’.

1. Australia is the lucky country

The myth of the lucky country must be the most overused phrase to describe Australia’s presumed exceptionalism. It’s true that there is a lot of luck involved in property speculation. The property boom saw property values in Sydney increase tenfold over the past 20 years. A combination of rapid population growth, the Sydney Olympics and the policies in the Howard years encouraging people to get into the property investment game are the blame.

But as with all things that are too good to be true, there is a but. Sociologist Donald Horne who coined the phrase in his book, The Lucky Country, in 1964, actually said that “Australia is a lucky country run mainly by second rate people who share its luck.”

He continued [Australia] “lives on other people's ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise.”

Surely the COVID pandemic has taken many by surprise, not just down under. But will Australia’s ordinary investment property owner prove the economists wrong again against the odds?

2. Australia is an egalitarian society

Myth has it that Australian ‘mateship’ is built on flat hierarchies and a class-less society. In reality, the rapid accumulation of wealth is deepening the divide between the asset rich and the asset poor. A 2016 report by the Evatt Foundation found that the poorest 40% of Australian households effectively have no wealth at all. At the opposite side of the spectrum, the wealthiest 10% have more than half the nation's total household wealth. Compared with 17 other OECD countries the study found that contrary to national mythology Australia is no more egalitarian than the average rich country, and it could be more inegalitarian.

The property boom is closely linked to the widening gap between the asset rich and poor. As the Sydney Morning Herald points out, “the disparity has been driven by increases in superannuation balances and the housing market, pushing the average household wealth past the $1 million mark for the first time” in 2018. The article quotes ABS data that also shows low-wealth households have not experienced any real increase in net worth during the past 15 years.

3. Social cohesion can only be achieved through home ownership

It’s a chicken and egg question which came first: Public opinion or politicians jumping on the bandwagon. Here we read on the Australian Parliament website that “home ownership continues to hold a special place in the Australian psyche”.

But while it’s romantic to opine that “home ownership provides people with a sense of physical and emotional security and safety”, the reality is that home ownership across Australia is on the decline, and renters are denied a sense of security and privacy by concerted efforts of the property industry to block even the most moderate tenancy reform.

Adding insult to injury, the same government report quotes the Productivity Commission in saying that “owner occupiers are likely to have stronger incentives than renters for civic involvement; less frequent relocation, due to the security of tenure provided by ownership, minimises disruption of social networks and children's education; and home ownership enhances self esteem, in turn reducing the incidence of socially disruptive behaviour and promoting physical wellbeing.”

Renters also deserve a sense of security and belonging

I was really shocked to see the highest echelons of power repeat divisive stereotypes of renters being second class citizens, shifty and selfish while home owners are somehow better people. And that’s the way the government wants to keep it (most politicians have not only invested in their own home but own many investment properties).

Compare that with countries like Germany which have traditionally higher proportion of renters and lower levels of home ownership. Due to strong tenant rights, families are able to raise their kids in a rental property, all the way from kindergarten to high school.

It’s hard to imagine that level of stability in a place like Sydney where the standard lease is 6 months and tenants can be evicted for no reasons (normally because they dare to ask for repairs and maintenance). But that’s not the renters’ fault, that’s social disadvantage by design.

Renters are working families with aspirations for themselves and their children’s education. Many I know (including myself) are involved in volunteering and community activities.

Blindly perpetuating the myth of home ownership for ‘wellbeing’ and social harmony has more potential to create tensions than finally tackling rental reform at large.

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