Richard Watson

Leaving the parental home in Australia over the generations: Evidence from the Household, Income and Labour Dynamics in Australia (Hilda) Survey

The decision to remain in or leave the parental home represents the first housing career choice of young people. In this paper, we examine the parental home leaving outcomes for Australian birth cohorts in the twentieth century using recall questions contained in the Household, Income and Labour Dynamics in Australia Survey. The findings from survival analysis and hazard function modelling is that a continuous, gradual reduction in the age of first leaving the parental home in Australia is evident up to the 1947–51 birth cohort, followed by stability and then a rise in age of first leaving home for the most recent birth cohorts. Birth cohort effects remain significant even after other measured determinants of parental home leaving are taken into account. The paper confirms the strong roles that education, family background and ethnicity have on parental home leaving outcomes.

Low Income Housing Tax Credit Programme Impacts on Housing Affordability in Australia: Microsimulation Model Estimates

Growing concern about a lack of rental housing affordable to low-income Australian households has prompted consideration of possible policy interventions. This paper estimates the potential housing market impacts of a tax credit targeted on rental housing affordable to low-income Australian households. The study finds that existing landlords in low-income rental housing benefit from a one-third or more reduction in their effective tax burdens. If these tax benefits are passed on in the form of lower market rents, it is estimated that the percentage of households paying more than 30 per cent of gross income in rents falls from 26 to 21 per cent. This impact would be larger but for eligible households in receipt of demand-side subsidies in the form of rent assistance. As a consequence, many low-income households receive only part of the low income housing tax credit benefits that are passed on into lower market rents. Moreover, higher income tenants occupy some of the cheaper rental housing targeted by tax credits, and this weakens the policy rationale for such supply-side measures. The paper advocates the adoption of headleasing arrangements to increase the share of benefits received by low-income tenants.