Murdoch University Research Repository

Welcome to the Murdoch University Research Repository

The Murdoch University Research Repository is an open access digital collection of research
created by Murdoch University staff, researchers and postgraduate students.

Learn more

Microsimulation modelling of tenure choice and grants to promote home ownership

Wood, G., Watson, R. and Flatau, P. (2006) Microsimulation modelling of tenure choice and grants to promote home ownership. The Australian Economic Review, 39 (1). pp. 14-34.

Link to Published Version:
*Subscription may be required


This article develops a microsimulation model of the Australian housing market that has tenure choice as its principal focus. The article sheds light on the role played by relative prices, wealth and borrowing constraints in shaping housing tenure choices. We explore the model's capabilities as an aid to policy making by reporting the findings from an impact analysis of grant programs designed to ease the transition of first home buyers into owner occupation. We find a large demand for home ownership that is not met because of borrowing constraints. The need to meet financial institutions' down payment requirements is particularly important. Government grants made available to first home buyers will ease down payment requirements, but the formal incidence of such a subsidy is found to be inequitable among potential first home buyers, and its impact is largely to bring forward purchase decisions.

Item Type: Journal Article
Murdoch Affiliation(s): Murdoch Business School
Publisher: Blackwell Publishing Asia Pty Ltd.
Copyright: 2006 The University of Melbourne. Melbourne Institute of Applied Economic and Social Research
Item Control Page Item Control Page