Rising house prices can lock people in marriages – realestate.com.au

House prices continued to rise throughout Australia in June, according to recent data. National prices have risen by around 38% in the last five years.

Higher house prices simply contribute, albeit a very important, for the costs of living with which Australian households are confronted. Energy prices are another.

These higher costs of living and the financial stress associated with them are linked to a series of negative results for households, including poor health and well -being, greater housing insecurity and some families must go without essential items.

A consequence of house prices that have largely ignored is their relationship with marriage and divorce.

Divorce percentages are at historic lows

The partition speed in Australia is on the lowest level Since the introduction of no-fault separation in 1976.

The recession of the nineties was also a period of considerable financial problems for households, and divorces rose at the time. Why is this happening now?

Couples can rather divorce, but cannot do for financial reasons.

Why? Simply put, divorce is a decision that entails considerable costs. The financial implications of divorce can mean that couples stay together longer than they would like.

Why do people choose to get married or divorce?

To understand divorce patterns is a good place to start thinking Why Couples choose in the first place to get married or separate.

Economists claim that individuals get married if the expected benefits of marriage are exceeding the benefits of being single.

As new information is created or unexpected results take place, individuals can re -assess their beliefs about the expected benefits of being married to be a single.

In turn, we could expect that divorce occurs if one of the two partners believes that they will be better outside of marriage than in it, taking into account all costs and limitations.

How house prices can influence the chance of divorce

Research shows that house prices are closely linked to a series of domestic behavior and results, including consumer expenses, employment facilities and fertility intentions.

Rising house prices can encourage couples to stay married (or not separated) because of the higher housing costs with which they would be confronted if they separated.

It is generally cheaper to run a single household where many resources are shared instead of two separate households. This can be considered as a cost That is part of higher house prices.

The high costs of housing can influence the decisions of couples to separate. Photo: Getty

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Of course, higher house prices also offer some benefits in the case of separation. For homeowners, it is active of the pair more valuable and the wealth to which every partner is entitled is greater. This benefit From divorce, couples can encourage and separate.

Our research, presented at the Australian Conference of Economists in July and not yet Peer Reviewed, deals with this issue. We looked at whether unexpected changes In the growth of house prices are related to the probability of divorce.

It is important to concentrate on unexpected changes in house prices. Unexpected changes, or “shocks”, will lead to individuals their decision to stay married, or separate and divorce.

Which factors explain divorce in Australia?

Our research tried to understand the most important factors related to divorce in Australia with the help of the household survey, income and labor dynamics in Australia (Hilda).

Not unexpectedly, we found couples who share similar properties as the same religion, education level or place of birth, more likely to stay married. For a longer time married is also linked to couples who separate less quickly. Partners whose parents were divorced, on the other hand, separate themselves.

It is important that the inclusion of housing price shocks in our analysis indicates that they have a significant effect on the probability of divorce. But the effect differs depending on whether the shock of the housing price is positive or negative.

For homeowners, the growth of lower than non-softening housing price increases the chance of separation considerably. In this case the cost of the prices of the lower houses is more important than the benefit From lower prices. If house prices do not grow as fast as expected, mating can separate, knowing that they will not be confronted with a fine that runs individual households.

So which lesson can be drawn from this research and why is a connection between house prices and divorce important?

Our findings indicate that higher than expected house price growth can keep some people in marriages they would otherwise leave, but not, for financial worries. This rather includes women with a low level of education, households with a low income and older couples.

In some cases this will have negative consequences. Often these harmful consequences are disproportionately experienced by women and policy environments play a role in reducing those effects.

You only have to look at initiatives such as the Leaving Violence program. By offering financial support to help people who leave potentially dangerous relationships behind, the barriers will relieve high housing costs related to the divorce.

Authors: Stephen Whelan, Association Lecturer Economy, University of Sydney and Luke Hartigan, Economy teacher, University of Sydney.

This article has been re -published from The conversation With permission.