For most of Australia’s modern history, the deal was fairly simple.

Study hard.

Work hard.

Take some risks.

Buy a home.

Maybe buy another one if you were prepared to sacrifice a few holidays, drive an older car and live on two-minute noodles for a while.

It wasn’t always easy. But it was possible. Lately, however, the language seems to be changing.

The phrase “intergenerational equity” is appearing everywhere. Politicians, economists, commentators and policy makers all seem to agree that something must be done to address wealth inequality between younger and older Australians.

Fair enough.

But it does raise an interesting question.

What exactly are we trying to achieve?

Are we trying to create a nation where more people own homes? Or are we trying to create a nation where more people can afford to rent them? Because they are not necessarily the same thing.

Many of the proposed policy settings currently being discussed appear designed to make residential property investment less attractive to the traditional mum-and-dad investor.

Perhaps that’s justified. Perhaps not.

But if smaller investors leave the market, somebody else needs to provide the housing.

Who will that be? Increasingly, the answer appears to be institutions.

Large funds. Superannuation funds. Property trusts. Corporate landlords.

The very organisations with access to billions of dollars and balance sheets that make most family investors look like amateurs.

It is already happening overseas.

In parts of New York, entire residential buildings are owned by institutional investors. Residents rent. Often for decades.

In Singapore, government-directed housing dominates much of the residential landscape, with the state playing a far larger role in housing outcomes than Australians have traditionally been comfortable with.

Neither system is necessarily right or wrong.

But they are very different from the Australian model.

For generations, Australia has been a country that encouraged ownership.

Ownership of homes.

Ownership of businesses.

Ownership of farms.

Ownership of assets.

Ownership creates something powerful.

It gives people a stake in the future.

A reason to save.

A reason to invest.

A reason to take risks.

Which raises another uncomfortable question.

When politicians speak about intergenerational equity, are they talking about equal opportunity?

Or equal outcomes?

Because those are very different objectives.

Most Australians would support the idea that everyone should have the opportunity to build wealth. Far fewer would support the idea that wealth should be redistributed simply because some people have accumulated more than others.

The distinction matters.

A society that rewards initiative tends to encourage innovation. A society that punishes success too aggressively can sometimes achieve the opposite.

History offers examples of both.

Of course, none of this means housing affordability should be ignored.

Far from it.

The dream of home ownership is becoming harder for many Australians. That’s a genuine problem. But perhaps the bigger question is whether our solution is aimed at creating more owners or simply more renters.

Because if private investors retreat and institutional capital fills the void, housing may still get built.

People may still get housed.

The lights will stay on.

The sky won’t fall.

But the nature of ownership could change dramatically.

And if it does, we should probably have an honest conversation about that. Not because one model is necessarily better than the other. But because they lead to very different versions of Australia.

One final thought.

When future generations look back at this period, will they say we solved the housing crisis?

Or will they say we solved it by changing what Australians were allowed to dream about?

That’s a very different question.

And one worth asking.

Derek Baston
sales@bastonandco.com
0417 99 23 24