Maysoon El-Ahmad on April, 2017


Housing affordability has generated much debate among policymakers in the last decade as it continues to be one of Australia’s  biggest concerns.

The future for young Australian’s entering the property market looks particularly grim – and a predicted lifetime of renting has dubbed them “Generation rent’ as they are poised to experience what no generation has before them.

Both Sydney’s house price-to-income ratio (9:8) and the debt-to-income ratio (187%) are global records –  placing Australia in the ‘severely unaffordable’ category based on a global survey on housing affordability.

While policy makers speculate changes in negative gearing and capital gains discounts to help improve affordability, this won’t be enough to help young people gain a foothold in the market.

So is shared ownership / shared equity a  solution?

We are already seeing versions of shared equity models being introduced or proposed by financial institutions and governments in Australia.

The Victorian Government has just announced a new shared equity scheme trial for low-income earners. If homebuyers have a 5 per cent deposit, the government will cover the rest -however they will also own up to 25 percent of the home.

Born out of frustration, the US tech start-up, ‘Point’, recently introduced a new way of achieving home ownership using a shared equity model. Here’s how it works. Point makes a provisional offer to purchase a fraction of your home for a share of your home’s future appreciation.  There are no monthly payments or interest rate, you can buy Point out or sell the home at any time and they lose money if the home depreciates.


  • We don’t believe the housing affordability problem will be easing off anytime soon without the help of some radical changes introduced by policy makers.
  • Recent studies have shown that home ownership is 8% higher in suburbs with shared equity schemes. While new shared equity models such as those introduced by the Victorian government is a good start, more will need to be done to have a lasting impact on those who are currently locked out of the market.
  • While shared equity models will not be the panacea to the problem, we believe new models of home ownership will be important in helping low-income households and young people gain a foothold in the market. ‘Point’ being a good example of how the issue could be solved.
  • With flexibility becoming a growing need and expectation among consumers across all facets of society, we expect to see more innovations offering flexible and alternative options to home ownership in the not too distant future.
  • We also think ideas like these are one step closer to developing societal rather than simply economic change – so we hope they work!
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