Working Paper

Housing and the transition into adulthood – Australian evidence

Published: 2022

Non-technical summary

In Australia and other countries young adults are spending increasing periods of time in the parental home. The pattern reflects a range of social, demographic and economic influences. For example, younger cohorts are spending longer periods in education and delaying fertility. Where individuals do enter full-time employment, they are facing an increasingly precarious labour market. The experience of older cohorts who exhibited a stylised transition from the parental home into rental accommodation and subsequently homeownership is increasingly challenging in housing markets characterised by rapidly rising house prices.

The transition from the parental household has traditionally been seen as one of the markers that define the transition into adulthood. The establishment of an independent household brings with it challenges and opportunities. While housing costs are likely to be higher, living independently from parents brings greater privacy and the need to develop life skills around budgeting and management. We argue that housing independence may be considered along a continuum which takes into account not simply where individuals are living, but also the responsibility they bear for housing and related expenses. In doing so, we create a categorisation of housing independence that encompasses where individuals reside and the responsibility taken for housing-related costs. We examine housing independence using two datasets, namely the Longitudinal Survey of Australian Children (LSAC) and the Household Income and Labour Dynamics in Australia (HILDA) data. Together these data provide insight into the housing experiences of young Australians as they leave secondary education and transition into adulthood.

We find evidence of disparities in housing outcomes by socio-economic status (SES) and gender. For young adults whose parents are high SES, there is a significantly higher likelihood they will report coresiding without contributing to housing expenses. This disparity is large and more pronounced for women, for whom the SES gap is 30 percentage points, than for men, for whom the SES gap is 25 percentage points. Conversely, where parents have low income or lower levels of education, adult children are significantly more likely to coreside and contribute to housing expenses through the payment of board. The difference is large, in the order of 25 percentage points greater than their high SES counterparts. Further, low SES young women are more likely to have left the parental home and not receive any accommodation support compared to high SES young women. Additionally, we find evidence that the presence of parental-child conflict makes coresidence less likely. Housing is a critical mediating influence for outcomes related to education, employment, health and financial stress. Accessibility to affordable and secure housing provides opportunities to accumulate human capital and savings, and consequently opportunities over the life-cycle. Ideally, policy will be designed in a way that reflects the housing circumstances of young adults so as to support opportunities around education and welfare more broadly.

Atalay, K., Silva-Goncalves, J., Stevens. K. & Whelan, S. (2022). ‘Housing and the transition into adulthood – Australian evidence’, Life Course Centre Working Paper Series, 2022-16. Institute for Social Science Research, The University of Queensland.