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Housing Tenure Choice in Australia and the United States: Impacts of Alternative Subsidy Policies
Author(s) -
Bourassa Steven C.,
Yin Ming
Publication year - 2006
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/j.1540-6229.2006.00168.x
Subject(s) - subsidy , economics , payment , cash , labour economics , demographic economics , finance , market economy
This article compares the homeownership rates of young households in Australia and the United States and evaluates the impacts of the two countries' different approaches to subsidizing homeownership. Since about 1950, Australia's rate of homeownership has consistently been higher than that of the United States. The homeownership rate for young adults is also significantly higher in Australia. While the United States allows mortgage interest and property taxes to be deducted from income for tax purposes, Australia has provided cash subsidies for down payments and mortgage payments. We conclude that differences in housing costs and household characteristics do not explain differences in ownership rates. We also conclude that differences in subsidy policies have only a minor impact on ownership rates.