Part 3: The 1950s — How Home Ownership Spread

Part 3 of Rate Challenge’s ten-part history of Australian housing affordability, following the prices, home loans and government decisions that shaped the market from 1945 to 2025.

Seven in ten households owned their home

Australian home ownership rose from about 53% in 1947 to 70% in 1961. In fourteen years, owning a home became substantially more common, even as the country’s population grew.

The historical census figures, compiled by the Australian Housing and Urban Research Institute, put ownership at 63% in 1954. Much of the increase had already occurred before the Menzies government changed its housing agreement in 1956. 3

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The figures also show where much of the increase occurred. The share of households still paying for their home rose from about 8% in 1947 to 23% in 1961. Borrowing was helping a growing number become owners. 3

This expansion took place in a closely regulated lending system. Banks’ interest rates were controlled, and the amount of credit available could be restricted. A buyer’s ability to obtain a loan depended partly on the funds a lender was allowed to advance. 6

The boom and reversal behind household budgets

The decade began with a surge in Australian export earnings. The Korean War drove up demand for wool, then one of the country’s major exports. Prices subsequently collapsed, reversing part of the economic stimulus. 124

The effect on living costs was dramatic. Consumer prices rose about 25% in the year to December 1951. By late 1954, annual inflation had fallen to around zero. 124

Robert Menzies led the Liberal–Country Party government throughout this period. Treasurer Arthur Fadden’s 1951–52 budget raised taxes sharply, reinforcing the slowdown as the export boom faded. 24 23

For households, the change reached beyond the price of a home. Higher food and other everyday costs could absorb money intended for savings. The subsequent slowdown brought a different concern: keeping the earnings needed to save and repay a loan. An eventual rise in ownership does not mean the path was smooth for each buyer.

Population growth also continued. Migration added about 1.2 million people between 1946 and 1960, accounting for more than a third of population growth over that period, according to the National Museum of Australia. The housing system was accommodating new arrivals as well as existing households. 22

Menzies redirects housing finance

In 1956, the government changed how Commonwealth housing advances were distributed.

The revised Commonwealth–State Housing Agreement required at least 20% of advances in 1956–57 and 1957–58 to support people building or buying their own homes through building societies and other approved institutions. From 1958–59, the minimum increased to 30%. 4

Public housing remained part of the arrangement, while a larger share of the federal finance supported private ownership. The percentages applied to ordinary advances under clause 5 of the agreement, not to all Australian housing expenditure. 4

For an eligible buyer, assistance could therefore arrive through the institution financing a home. The government did not need to give the buyer a cash grant to support the purchase.

A low interest rate did not guarantee a loan

The RBA’s advertised standard variable housing loan series begins at 5% in 1959, but access to finance remained restricted. 9 6

An RBA history of the financial system describes bank credit in the 1950s as rationed. Life insurance companies also provided mortgages, meeting some of the demand banks did not satisfy. Building societies would become increasingly important as the regulated banking system lost business to other institutions. 6

Canada was addressing access to finance through another route. In 1954, its national housing corporation introduced mortgage loan insurance, reducing lenders’ risk and helping buyers purchase with smaller down payments. 106

In Australia, direct help with a buyer’s savings would follow a decade later. In 1964, Menzies introduced a grant that added £1 for every £3 an eligible applicant had saved, up to £250. 5

The historical sources in this chapter extend the research behind our Housing Affordability Explorer to the decades before its 1980 starting point.

Rate Challenge · Housing affordability history · Part 3 of 10 · The 1950s. Draft revised 25 September 2026; sources checked 30 September 2026.