The persistent housing boom in Australia’s cities, especially Melbourne and Sydney, is often framed as an intergenerational clash in which younger generations are being priced out of the market by baby boomers. However, sociological theories of social class suggest parents’ wealth and social status will ultimately be passed onto their children anyway.
So, by focusing on intergenerational inequalities that will sooner or later be reversed, we are framing the housing affordability question the wrong way. At the same time, the impact of the housing boom is so deep that some long-established thoughts about social class may be no longer relevant.
The housing boom has blurred on hand boundaries between upper, middle and lower classes that applied to the baby boomers and previous generations. New social class boundaries and formations are being produced.
· In the industrial city, the term “working class” was distinct from the experiences of low-income workers in manufacturing jobs. Yet in a post-industrial Australian city it makes more sense to talk about the “renting class”. Not all renters are deprived, and not all poor households are private renters. However, the correlation between the two is important and strengthening. The percentage of private renters in the total population is slowly but surely increasing – from 20.3% in 1981 to 23.4% in 2011.
· More than just a status symbol, home ownership has become ever more central to the way most Australians accumulate wealth. About half of the homeowner's wealth is held in their own home. Each housing boom enriches them additional through tax-free capital gain on their homes.
· The housing boom also generates work in the construction industry, which is the third-largest employer in Australia with more than one million workers. These are no longer working-class occupations, with most skillful jobs paying average weekly earnings of close to A$1,500. So, it is arguably the home-owner class that benefits most from each construction boom.
· The housing elite is satisfied by the housing boom well beyond the capital gain on their own homes. Much of the enormous wealth of Australia’s elite is generated through the housing market – through investment, construction and financing of housing.
The deepening fusion between Australia’s housing system and its social class system creates a dangerous sequence. The further house prices grow, the more significant housing becomes as a determinant of social class. And when social class is ever more defined by the housing, people are willing to bid even higher to enter home ownership or the housing elite.