Ross Greenwood: The Grattan Institute says home ownership rates have fallen for low to middle income owners, while higher income households have barley been affected by the big rise in house prices in the past eight years.
Middle income households spend an average of 28 per cent of their pre-tax income on rent or mortgage payments, the report says.
Financial stress on households has increased despite record low interest rates. Young home buyers, the report says, are being forced into the outer suburbs of capital cities – further away from their place of work, putting pressure on roads and public transport.
The Grattan Institute recommends changes to capital gains tax, negative gearing, and a slowdown in immigration to take pressure off house prices.
In response, The Housing Industry Association says more land needs to be freed up, and has called for stamp duty to be abolished.
Ross Greenwood is the Nine Network’s business and finance editor, and hosts Sydney's top-rating radio program, Money News, for 2GB, 4BC. 3AW and all networked stations across the Macquarie Media group.
He appears daily on the Today Show - notably for his Money Minute - and Nine News.