Indigenous Australians who own their homes feel safer, more positive about the future, and more engaged in work and school, according to recent research from Deloitte.
And the benefits are far-reaching. Work undertaken by Indigenous Business Australia (IBA) to support Aboriginal and Torres Strait Islander people into home ownership has a positive economic impact on the economy and all Australians, the research shows.
Reduced pressure on the wider economy
Nicki Hutley, a partner at Deloitte and leader of Deloitte Access Economics’ Urban Advisory practice, says the benefits of home ownership are multidimensional. “Social policymakers understand that a housing-first approach to dealing with social issues is so important,” she says.
Hutley has driven research on IBA’s Indigenous Home Ownership Program (IHOP), a government initiative offering financial assistance for Indigenous home ownership. In 2017-18, it reduced reliance on rental assistance by $2m, and saved $370k in avoided homelessness.
The avoided costs of homelessness due to the IHOP program is valued at $7 million in total for the period of 1975-76 to 2017-18, and $370,000 for 2017-18. Source: Deloitte Access Economics.
These statistics are impressive, but the real impact of IBA’s work is much broader. IBA’s work not only reduces government expenditure, but also helps free up social housing, making it accessible for others who would otherwise be facing homelessness, making a better life for more families, and their communities.
Economic injections that would not otherwise happen
IBA chair, Eddie Fry, says economies are flatlining as people become more nervous about how they use their money. But that makes people think less about themselves and more about how we can all do better.
“I think when we get into the same boat, people tend to think more broadly about the wider community,” he says.
Supporting home ownership for people who would otherwise not have access stimulates financial activity. Hutley says it injects new funds into the economy, both at a federal and local levels.
“As a result of more stable employment and better education outcomes, the next generation gets to have better employment opportunities,” she says. “That doesn’t only help avoid social transfer payments to people who are unemployed; it actually generates greater taxation revenues to government.”
These revenues come from income tax, payroll tax, and higher GST collections because people with higher incomes are spending more. This increased government revenue can be used for the benefit of all Australians.
“This [IBA] program enables investment in housing that wouldn’t otherwise occur and actually adds to the amount of economic activity that’s happening,” Hutley says.
Improved overall wellbeing
IBA’s work supporting Indigenous home ownership outcomes generates further ripple effects that benefit all Australians and the broader economy. Deloitte’s research shows Indigenous homeowners feel less reliant on others for help. That feeling of agency is reflected in general wellness: those surveyed said they felt more motivated about work, were earning more and encouraging their children to further their education. All these factors stimulate local economic activity.
“But then it also generates additional benefits in terms of better social outcomes, including health, education, employment, safety and self-esteem,” Hutley says. Financially, Hutley says, IHOP has delivered almost $895m in social and economic benefits over its lifetime.
Fry agrees that the combination of outcomes is significant. “The focus on Indigenous home ownership is so important for the nation,” he says. “Home ownership leads to sub-text outcomes that make up the wellbeing of a family unit.”
It also improves the wellbeing of the wider family network, he says. “And that extends into the non-Indigenous sector.”
Home ownership creates long-term generational wealth
In Australia, home ownership is critical to creating long-term wealth. The Grattan Institute reports that, in an ageing population, property contributes the majority of total net wealth, while the figures from the Australian Housing and Urban Research Institute show those of us who inherit property wealth will be able to invest more, and in areas with greater capital growth.
Hutley says: “We know that Australians use home ownership as a primary means of generating wealth. We also know increasingly that if you retire without owning your own home, you are much more likely to be living in poverty.”
Indigenous Australians have faced decades of intergenerational disadvantage, which Hutley says is among the most difficult challenges they face. But programs such as IHOP help to break that cycle. “You’re not only taking the current generation potentially out of poverty by building an asset for them,” she says. “You’re then able to pass it on to future generations.”
In addition, as Fry explains, the program supports lateral wealth generation. As Indigenous home ownership grows, loan repayments are used to support further loans for other families.
As a program that is financially sustainable in its own right, Fry hopes support for it will continue to grow, commensurate with the overwhelming demand that IBA experiences from customers who are locked out of accessing mainstream lending options for home ownership because of lower incomes, lower savings, lack of credit history and limited experience with loans.
“Acceptance by society is when society realises everyone’s pulling in the one direction,” he says.
“We don’t want to forget the past, but we want to be looking out the front window. That’s where the demand is, and that’s where we need to be putting all of our strategic thinking.”
Find out more about the IBA Indigenous Home Ownership Program.
Credit: Source link