TY - RPRT AU - Barrett, Garry AU - Cigdem, Melek AU - Whelan, Stephen AU - Wood, Gavin CY - Melbourne L1 - internal-pdf://3438919092/AHURI_Final_Report_No250_The relationship betw.pdf M1 - 73034 M3 - FR N1 - This project explores the role of intergenerational wealth transfers on housing and related economic outcomes. It quantifies transfers from Australian parents to their children, models their impact in aiding home ownership for recipients, and estimates its impact on broader economic outcomes such as wealth distribution. Home ownership is valued not just for the housing it provides but also as a means to accumulate wealth over the life-cycle. However, there is evidence that younger generations are making later transitions into home ownership and increased numbers not entering at all—this is not just among low-income earners but also middle-upper income Australians aged 25–44. Even so, parental transfers—those occurring while parents or relatives are alive ('inter-vivos' transfers) or after they die ('bequests')—might have an important role in overcoming intergenerational inequities by assisting people to enter first home ownership. This study used longitudinal data from the Household Income and Labour Dynamics Australia Survey (HILDA) to model the impact of transfers on the likelihood recipients enter home ownership and its impact on overall distributions of wealth. The study found that receipt of a bequest increases home ownership rates among beneficiaries by 4 to 8 percentage points, and outright ownership by 10 percentage points compared to non-recipients. The probability of entry into first home ownership increases at or just after a bequest is received. Large inter-vivos gifts (over $5000) are also associated with transition into home ownership. Bequests and inter-vivos gifts are also associated with recipients purchasing higher value housing compared to those not receiving such gifts. While inter-generational transfers of this type appear to be beneficial for the younger generation that receive them, it is clear the net effect is regressive for overall wealth distribution. This is because renters are less likely to receive transfers compared to those already in home ownership. This suggests that there is a clear potential for housing transfers to play a role in wealth becoming more concentrated over time. The findings help initiate a discussion around how large wealth holdings held by older generations that have benefited from increasing house prices might be unlocked for the benefit of younger generations while relieving pressure on government budgets. However, it also highlights the importance of tax and transfer policies in redressing inequities within generations, including how to target those groups that might miss out on intergenerational transfers. NV - Sydney University PB - Australian Housing and Urban ÂþÌìÌÃÈë¿Ú Institute Limited PY - 2015 RP - This project explores the role of intergenerational wealth transfers on housing and related economic outcomes. It quantifies transfers from Australian parents to their children, models their impact in aiding home ownership for recipients, and estimates its impact on broader economic outcomes such as wealth distribution. Home ownership is valued not just for the housing it provides but also as a means to accumulate wealth over the life-cycle. However, there is evidence that younger generations are making later transitions into home ownership and increased numbers not entering at all—this is not just among low-income earners but also middle-upper income Australians aged 25–44. Even so, parental transfers—those occurring while parents or relatives are alive ('inter-vivos' transfers) or after they die ('bequests')—might have an important role in overcoming intergenerational inequities by assisting people to enter first home ownership. This study used longitudinal data from the Household Income and Labour Dynamics Australia Survey (HILDA) to model the impact of transfers on the likelihood recipients enter home ownership and its impact on overall distributions of wealth. The study found that receipt of a bequest increases home ownership rates among beneficiaries by 4 to 8 percentage points, and outright ownership by 10 percentage points compared to non-recipients. The probability of entry into first home ownership increases at or just after a bequest is received. Large inter-vivos gifts (over $5000) are also associated with transition into home ownership. Bequests and inter-vivos gifts are also associated with recipients purchasing higher value housing compared to those not receiving such gifts. While inter-generational transfers of this type appear to be beneficial for the younger generation that receive them, it is clear the net effect is regressive for overall wealth distribution. This is because renters are less likely to receive transfers compared to those already in home ownership. This suggests that there is a clear potential for housing transfers to play a role in wealth becoming more concentrated over time. The findings help initiate a discussion around how large wealth holdings held by older generations that have benefited from increasing house prices might be unlocked for the benefit of younger generations while relieving pressure on government budgets. However, it also highlights the importance of tax and transfer policies in redressing inequities within generations, including how to target those groups that might miss out on intergenerational transfers. ST - The relationship between intergenerational transfers, housing and economic outcomes T2 - ÂþÌìÌÃÈë¿ÚFinal Report No. 250 TI - The relationship between intergenerational transfers, housing and economic outcomes UR - /research/final-reports/250 ID - 475 ER -