Home ownership rates on the way down Owning a home is proving simply too costly for many. Picture: Ian Mainsbridge THE dream of home ownership is waning for young Australians, in a radical cultural shift. The federal government's housing supply council has revealed the nation faces "an impending very substantial fall in home ownership" as young families choose to rent for lifestyle reasons or are locked out of home ownership altogether because of rising costs. While low income families have been hit hardest by the home price squeeze, the report also reveals more high income households are also choosing to rent for lifestyle reasons. "People adapt pretty quickly," the chair of the National Housing Supply Council, Donald Owen, said. Their expectations change and so we get a combination of lifestyle things, people saying I don't know where I want to work so I'll wait to buy. But equally the cost is very high. Falling home ownership rates are at odds with Australia's history over the past half century. "After the Second World War, the trend was towards rising rates of home ownership," Dr Owen. That continued up until about 1975. Then it peaked and hovered there for about two decades. Now it is very clearly on the downward slide. Australians are scaling back their housing aspirations in response to the persistent housing shortage and poor affordability, the Council's report finds. "The future is apartments and medium to high density," Dr Owen said, predicting more Australians will live in high rise apartments or smaller homes to beat the price squeeze. Home prices rose 1.3 per cent nationally over the year to February, according to RP Data. The median capital city house price now stands at $485,000, with the median unit price marginally more affordable at $415,000. The Council is also tipping a reversal in the decades long trend towards smaller households, as young adults stay at home longer. Baby boomers will be the last generation to live the home ownership dream, the report predicts. Four fifths of Australians aged 65 plus own their own homes today For Australians aged 25 to 34, less than half own their homes. According to Dr Owen, these children of the baby boomers will never achieve the same rates of home ownership as their parents. Home ownership is declining significantly across most age groups in the population. Older Australians, including the post-WWII Baby Boomer generation, have been instrumental in slowing the rate of decline but their impact will fade over coming years. The proportion of Australian households who own their home - either with or without a mortgage - has fallen from a peak of 71.7 per cent in the early 1990s to 68.7 per cent today. The rest of households rent, or are in public housing. Since the 1960s, the proportion of households that own their homes debt-free has fallen sharply from almost half (47.9 per cent) to less than a third (32.9 per cent). The report points the finger at restrictive planning processes by local councils and high charges imposed by state governments on new developments. Dr Owen said the shift to renting was not a cause for alarm, but simply the natural a response to higher home prices. I don't think we should worry about it we should just build it into the way we think about housing markets. A spokesman for the Housing Industry Association, Graham Wolfe said the reduction in appetite for home ownership was a concern. "If future generations of Australians give up the dream of home ownership and this is not matched with a substantial increase in private or public investment in housing, rental costs will increase beyond the means of many Australians," he said. The chairperson of National Shelter, Adrian Pisarski, said the lack of affordable housing was changing the national psyche. This is a reminder that affordable housing needs to be a priority, as well as a continued investment in social and affordable housing supply by government.