Property represents more than half of all household assets in Australia and its
share has been rising in recent years. Since most property purchases require debt
financing because of the size of the purchase, property makes up a large part of
both sides of households’ balance sheets. This paper uses household-level data to
examine what determines the ownership of residential property and the holding
of property debt by households in Australia. We examine these decisions for both
owner-occupied and investment property.
The results suggest that the household’s age, composition, income and wealth are
important factors determining property ownership and gearing decisions. Income
and wealth are found to be more influential in determining the value of property
owned, while the household’s age is more influential in determining the gearing.
Household composition is important for decisions on owner-occupied property,
but has a limited influence on investment property decisions.