Contrary to perceptions, the rate of home ownership in the Republic corresponds very closely to the international average, a study by the Organisation for Economic Co-operation and Development (OECD) has revealed.
The think tank’s latest “Society at a Glance” report showed that 71 per cent of Irish households either owned their dwelling outright or with a mortgage in 2016. This compared to an OECD average of 70 per cent.
The figures showed nearly 44 per cent of Irish households owned their properties outright while 27 per cent owned their homes with the aid of a mortgage.
The rate of home ownership here has been higher in the past. In 1991, it reached a record 80 per cent, one of the highest rates in western Europe.
However, affordability has become a major issue in recent decades, with many workers unable to get on the so-called property ladder, resulting in a much largest proportion of the population renting.
The OECD study showed just over 25 per cent of Irish households rented their properties in 2016, compared to an OECD average of 26 per cent.
The international picture is skewed by high ownership rates in former Eastern bloc countries such as Lithuania, Poland and Hungary, a result of the historic sales of state-owned housing in the 1990s. Conversely there are relatively low ownership rates in some Western European countries such as Germany and Switzerland, where the majority rent.
In Switzerland, one of the richest countries in the world, nearly 60 per cent of the population rented in 2016, which was the highest in the OECD, followed by Germany with 55 per cent.
In 2016, owners with a mortgage outnumbered outright homeowners in Iceland, Norway,the Netherlands, Sweden, Canada and the United States.
Housing cost burden
The study noted that affordable housing is a challenge for many households across the OECD with low-income dwellers facing “a significant housing cost burden”.
In 16 OECD countries, including the Republic, more than 40 per cent of low-income owners with a mortgage spent over 40 per cent of their disposable income on their homeloan in 2016. The same was true for low-income renters in private rentals in 14 OECD countries
In Greece and the US, low-income dwellers face a similar housing cost burden, regardless of tenure: in both countries, more than half of the low-income population spent over 40 per cent of disposable income on rent or a mortgage in 2016.
The OECD study also showed that the shares of working-age individuals receiving out-of-work benefits were highest in France, Finland, the Republic and the United States, with rates above 10 per cent. At the other end of the spectrum, in Chile, Israel, Japan, Korea and Turkey, less than 4 per cent of the working-age population received at least one of these payments.
“These differences in the number of recipients reflect not only differences in employment rates, but also differences in benefit entitlement rules,” the report said.
