Restructuring home loan finance for low-income families

Third and final evaluation report on the Department of Planning and Housing Victoria Capital Indexed Loan Scheme [CAPIL]


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Content type
Research report

August 1991

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This report presents the final results of the five year Capital Indexed Loan Evaluation Study conducted by the Australian Institute of Family Studies on behalf of the Department of Planning and Housing Victoria. The social and economic outcomes of home purchase for low-income families are examined, including: affordability, short and long term financial benefits, income and employment patterns, housing satisfaction, and understanding and acceptance of the loan instrument. The report's conclusion is: 'The twin problems of access and affordability are equally, if not more, pressing, than the economic climate that produced the original program. The CAPIL Scheme has offered low income families access to housing at affordable repayments. In the eyes of the clients, the full success of this Scheme rests on understanding the nature of this innovative loan, a loan without which owning a home would have remained a distant, unobtainable dream'

Table of Contents

  • Executive Summary
  • Chapter 1: Introduction to the Third and Final Report of the Capital Indexed Loan Evaluation Study
    • Introduction
    • The Capital Indexed Loan Scheme
    • Capil Families
    • The Structure of the Third Evaluation Report
  • Chapter 2: An Overview of Wave 3 Sample and Discussion of Sample Loss
    • Introduction '
    • Personal Interviews with Families Who Left the Capil scheme
    • Conclusion
  • Chapter 3: The Changing Composition of Capil Families:
    • Differences between Two- and One-parent Families
    • Introduction
    • Two- and One-parent Families
    • Family Change and Stability
    • Marital Status and Reliance on Government Benefits
    • Conclusion and Implications
  • Chapter 4: Employment and Income Changes Among Capil Families
    • Introduction
    • Employment Changes by Family Status
    • Employment Transitions. Through Time: Moves into Paid Employment
    • Explaining Employment of Married Adults
    • Explaining Employment of Sole Parents
    • Reasons for Not Being in the Labour Force
    • Main Reasons for Work-force Behaviour
    • Family Income and Changes in Income
    • Keeping up with Average Weekly Earnings
    • Marital Change and Family Finances
    • Summary and Implications
    • Appendix, Variables and the variable coding used in the regression models
  • Chapter 5: Housing Costs and Affordability
    • Introduction
    • Adjusting Mortgage Repayments
    • Analysis of Co-Variance: Mean Monthly Mortgage Repayments by Marital status and Employment Situation
    • Housing-related Financial Difficulties
    • Families with an Arrears Agreement
    • Financial Coping
    • Perceptions of Financial Situation: Current and Future
    • Summary and Implications
  • Chapter 6: Repairs and Home Improvements
    • Introduction
    • Trends in Working on the Home
    • Type of Work Carried Out
    • Financial Costs of Working on the Home
    • Non-financial Involvement in Major Work
    • Summary and Implications
    • Appendix, Description of variables and codes in the analysis
  • Chapter 7: Assessing the Benefits of Home Ownership
    • Introduction
    • House Price Movements
    • Modelling the Benefits Associated with Home Purchase
    • Key Features of Credit Foncier and Capital Indexed Loans
    • A Model of Housing Outcomes
    • Housing Outcomes: 1985 to 1989
    • Housing Outcomes: 1985 to 2009 Conclusions
    • Appendix
      • Modelling the Benefits Received Through Housing Purchase
      • Interest Charges
      • Capital Gains
      • Capital Growth
      • Transaction Costs
      • Imputed Rent
      • Maintenance Costs and Rate Charges
      • Opportunity Costs
  • Chapter 8: How satisfied are Capil Families?
    • Introduction
    • Changing Levels of Satisfaction
    • Has Home Ownership been Worthwhile?
    • Summary and Conclusion
  • Chapter 9: Do Families Understand the Capital Indexed Loan Scheme?
    • Introduction
    • Understapding the Capil loan
    • The' Borrower's Guide
    • Education and Language Important in Understanding the Capil Loan
    • Implications of Not Understanding the Capil Loan
    • Conclusions, and Implications
    • Appendix A
    • Appendix B, Variables and, the variable coding used in the regression model
  • Chapter 10: Summary and Conclusions
    • Introduction
    • Conclusion
  • References