Independent Living and Homeownership: An Analysis of Australian Youth
41 Pages Posted: 11 Jun 2007 Last revised: 31 Aug 2010
Date Written: September 1993
This study extends recent work that developed and tested economic models of the joint decisions of household formation and homeownership. The cost of shelter is an important determinant of whether youth live independently (apart from parents and other nonrelated adults), and the cost of homeownership relative to renting is important to the tenure decision. Simulations suggest that the post-1985 decline and eventual removal of the Australian subsidy for first time homeowners has lowered the homeownership rate among young households by 23 percent, which is equivalent to slowing the time to first ownership by two years for such households.
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