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Falling home ownership points to rising inequality

It is 30 years since Paul Keating famously said that if you walked into any pet shop in Australia "the resident galah will be talking about microeconomic policy".

There's a good chance those pet shop conversations have now turned to inequality.

During the past week the Opposition Leader Bill Shorten, Treasurer Scott Morrison, and even Reserve Bank governor Philip Lowe have all weighed in on the topic.

There are different perspectives on what's happened to income inequality recently. But the trend in wealth inequality is fairly clear. Governor Lowe says it has become "more pronounced" over the past five or six years.

If the latest figures on home ownership rates are any guide, the debate about inequality has a very long way to run.

The 2016 census, released in June, showed the share of home owners has slipped to 65.5 per cent, the lowest level in more than 60 years. There have been two distinctive features to this decade-long downward trend, one generational and the other geographical.

The decline in ownership has been sharpest among younger households. The 25 to 34-year-old cohort stands out. In 1986, 58 per cent in that age group owned a home but that's shrunk to 45 per cent. 

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