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1301.0 - Year Book Australia, 2009–10  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 04/06/2010   
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Contents >> Housing >> Housing and life cycle stages

HOUSING AND LIFE CYCLE STAGES

As people progress through different life cycle stages and their family structures and financial situations change, so do their housing needs and preferences. For young people leaving their parental home, a typical life experience with housing might begin with renting a small flat or unit for themselves or sharing a group house, then moving on to renting an apartment or house with their partner while saving for a deposit on their first home. Many couples will buy their first home and pay off a considerable part of their mortgage before having their first child.

10.20 Home ownership rates, By household composition - 2007-08
Graph: 10.20 Home ownership rates, By household composition—2007–08


Then, as the number and age of children increase, many will upgrade to a larger house. After the children have left home, most home owners will probably remain in the same home at least until retirement, by which time most will own their home outright. After retirement, some will change location, and in doing so a few will choose a smaller home, possibly a unit in a retirement village. Later, some who are too old or frail to live in their own home will move into cared accommodation (see Aged care in the Income and welfare chapter).

While most Australians aspire to own their home outright, at least by the time they retire, many on low incomes cannot afford to buy a home and some cannot afford to rent adequate housing. There are a range of government programs aimed at assisting low income households to buy or rent suitable and affordable housing (see Housing assistance).

10.21 Households with one or more spare bedrooms(a) - 2007-08
Graph: 10.21 Households with one or more spare bedrooms(a)—2007–08

10.22 SELECTED HOUSEHOLD AND DWELLING CHARACTERISTICS(a) - 2007-08

Proportion of households with characteristic

Estimated
number of
households
Average
number of
persons in
household
Average
number of
bedrooms
in dwelling
One or more
spare
bedrooms(b)
Living in
separate
house
Living in
flat/unit/
apartment
Home
owner
Renter
Household composition
'000
no.
no.
%
%
%
%
%

REFERENCE PERSON AGED UNDER 35 YEARS

Lone person
351.2
1.0
2.3
84.1
42.7
40.9
28.7
64.3
Couple only
390.9
2.0
2.6
93.9
64.5
24.2
46.2
49.7
Couple family with dependent children
483.7
3.9
3.2
65.5
85.3
8.5
58.2
39.4
One parent family with dependent children
153.3
3.0
3.0
44.0
77.3
12.3
17.3
79.7
All households(c)
1 692.8
2.6
2.8
68.7
64.0
23.8
37.2
58.8

REFERENCE PERSON AGED 35-44 YEARS

Lone person
256.2
1.0
2.4
85.3
52.6
32.4
47.6
45.3
Couple only
199.3
2.0
3.0
98.1
77.7
13.5
64.8
32.1
Couple family with dependent children
850.1
4.3
3.5
66.9
89.5
4.8
78.4
18.8
One parent family with dependent children
199.8
3.1
3.2
47.3
82.5
11.5
44.6
49.7
All households(c)
1 658.3
3.3
3.2
69.3
80.0
12.0
65.2
30.6

REFERENCE PERSON AGED 45-54 YEARS

Lone person
311.2
1.0
2.5
85.5
62.0
25.0
54.4
39.3
Couple only
282.3
2.0
3.2
98.4
84.8
6.8
84.0
13.0
Couple family with dependent children
649.4
4.3
3.7
62.1
91.7
4.1
86.7
12.2
One parent family with dependent children
125.3
3.0
3.2
52.4
81.6
*7.9
50.9
47.3
All households(c)
1 663.1
3.0
3.3
73.3
83.6
9.0
76.0
21.5

REFERENCE PERSON AGED 55-64 YEARS

Lone person
348.1
1.0
2.6
86.8
67.3
20.1
63.0
32.7
Couple only
552.0
2.0
3.4
99.9
93.3
3.3
92.7
6.2
Couple family with dependent children
131.7
3.9
3.7
63.9
89.2
*6.1
89.2
*10.8
All households(c)
1 351.8
2.2
3.2
87.9
85.7
7.9
82.5
15.7

REFERENCE PERSON AGED 65 AND OVER

Lone person
737.4
1.0
2.5
86.6
65.9
18.6
72.1
21.4
Couple only
717.2
2.0
3.1
98.3
89.1
4.4
91.6
6.3
All households(c)
1 711.2
1.7
2.9
88.9
78.9
10.7
83.3
13.0

ALL AGE GROUPS

Lone person
2 004.1
1.0
2.5
85.9
59.8
25.5
57.0
36.7
Couple only
2 141.6
2.0
3.1
97.9
84.1
8.9
80.1
17.5
Couple family with dependent children
2 129.0
4.2
3.5
65.0
89.2
5.5
77.2
20.9
One parent family with dependent children
497.7
3.0
3.1
47.4
81.0
10.4
38.1
58.1
All households(c)
8 077.3
2.6
3.1
77.3
78.1
12.9
68.3
28.4

* estimate has a relative standard error of 25% to 50% and should be used with caution
(a) By age group of household reference person.
(b) As measured against the Canadian National Occupancy Standard.
(c) Includes all other family and household types.
Source: ABS data available on request, Survey of Income and Housing.

In 2007-08, almost half of young (reference person aged under 35 years) couple only households, and over half of young couples with dependent children, owned their home (46% and 58% respectively) (graph 10.20 and table 10.22). The home ownership rate was considerably lower for young lone-person households (29%).

Home ownership rates increased with age of reference person up to age 55-64 years for all family and household groups. Beyond this age group, the home ownership rate for couple with dependent children households continued to increase, while the rate for lone parent with dependent children and couple only households declined. At age 65 years and over, home ownership rates for lone person and couple only households converged to some extent, reflecting the transition of couple only households to lone person households following the death of one partner.

One parent families with dependent children had the lowest home ownership rate (38%) and the highest proportion of renters, particularly public renters (table 10.22). In 2007-08, 16% of all one parent families with dependent children were renting from a state/territory housing authority and 42% were renting privately. Lone person households also had relatively high proportions of renters, with 9% renting from a state/territory housing authority and 28% renting privately (table 10.24).

People living alone are more likely to live in high density housing than any other group, particularly when young. In 2007-08, the proportion of lone persons living in a flat, unit or apartment ranged from 41% of those aged under 35 years to 19% of those aged 65 years and over. Even so, lone persons were more likely to have one or more spare bedrooms than families with children. In 2007-08, 86% of lone-person households and 98% of couple-only households had one or more spare bedrooms (graph 10.21).

There are long-term benefits in home ownership. Initially, the cost of home purchase is often far greater than renting (due to the costs of deposits and fees, as well as ongoing mortgage repayments). However, the much lower costs associated with owning a home outright, and the investment that a home represents, can be major contributors to economic wellbeing, particularly for older people, as many retire on considerably reduced incomes.

In 2007-08, the average weekly housing costs of young households with a mortgage was $472 - 74% more than the average weekly rent of young private renters (graph 10.23). The difference in housing costs between owners with a mortgage and private renters was progressively smaller in older age groups, mainly because of progressively lower mortgage payments. For households with a reference person aged 65 years and over, private rents were higher, on average, than the housing costs of home owners with a mortgage.

10.23 Average weekly housing costs, By tenure - 2007-08
Graph: 10.23 Average weekly housing costs, By tenure—2007–08

10.24 HOUSING COSTS, MORTGAGE, AND TENURE AND LANDLORD TYPE(a) - 2007-08

Proportion of households with characteristic

Average
weekly
housing costs
Average
housing costs
as a proportion
of gross household
income(b)
Average
amount of
mortgage
outstanding(c)
Proportion
of owner with
a mortgage who
are recent
home buyers(d)
Owner
without a
mortgage
Owner
with a
mortgage
Renter - state/
territory
housing authority
Renter - private
landlord
Household composition
$
%
$'000
%
%
%
%
%

REFERENCE PERSON AGED UNDER 35 YEARS

Lone person
258
26
189
62.7
3.5
25.2
2.5
61.9
Couple only
386
18
268
61.1
1.6
44.6
0.1
49.6
Couple family with dependent children
340
20
200
40.5
5.3
52.9
1.3
38.0
One parent family with
dependent children
211
26
165
*29.1
1.2
16.1
20.0
59.8
All households(e)
320
19
221
51.7
3.1
34.1
3.0
55.7

REFERENCE PERSON AGED 35-44 YEARS

Lone person
236
19
170
34.8
10.9
36.6
4.8
40.5
Couple only
408
15
219
42.4
7.5
57.3
2.0
30.1
Couple family with dependent children
370
16
203
24.8
12.5
65.9
1.0
17.8
One parent family with dependent children
229
22
143
31.7
7.7
37.0
13.4
36.3
All households(e)
330
16
197
29.2
10.8
54.4
3.6
27.0

REFERENCE PERSON AGED 45-54 YEARS

Lone person
178
18
115
20.5
19.0
35.4
10.6
28.7
Couple only
242
12
166
22.8
28.8
55.3
1.5
11.4
Couple family with dependent children
277
10
170
12.6
26.0
60.7
2.0
10.2
One parent family with dependent children
235
19
164
18.9
13.9
37.0
13.1
34.2
All households(e)
241
12
155
15.9
24.2
51.8
4.6
16.9

REFERENCE PERSON AGED 55-64 YEARS

Lone person
116
12
97
*19.8
41.3
21.7
13.1
19.6
Couple only
108
6
105
16.6
63.0
29.7
0.5
5.6
Couple family with dependent children
174
7
138
*10.0
48.7
40.4
1.3
9.6
All households(e)
129
8
113
15.6
52.8
29.6
5.1
10.6

REFERENCE PERSON AGED 65 AND OVER

Lone person
49
11
54
*21.3
69.0
3.1
11.1
10.4
Couple only
41
4
68
**6.4
85.6
6.0
2.5
3.8
All households(e)
48
6
70
*9.6
77.9
5.4
6.3
6.7

ALL AGE GROUPS

Lone person
141
17
138
33.4
37.5
19.5
9.0
27.7
Couple only
182
11
181
33.8
49.7
30.4
1.4
16.1
Couple family with dependent children
321
14
189
23.5
17.7
59.5
1.4
19.5
One parent family with dependent children
222
22
154
26.5
8.1
29.9
15.9
42.2
All households(e)
216
13
173
27.2
33.2
35.1
4.5
23.9

* estimate has a relative standard error of 25% to 50% and should be used with caution
** estimate has a relative standard error greater than 50% and is considered too unreliable for general use
(a) By age group of household reference person.
(b) Excludes households with nil and negative income.
(c) Only Includes owners with a mortgage
(d) Owners who built or purchased their dwelling in the three years prior to the survey.
(e) Includes all other family and household types.
Source: ABS data available on request, Survey of Income and Housing.

The difference in housing costs between younger and older owners with a mortgage is largely a reflection of the difference in house prices, and hence the amount borrowed, at the time of purchase. On average, recent home buyers paid higher prices than those who bought their homes ten or more years ago. In 2007-08, more than half (52%) of young households with a mortgage were recent home buyers compared with 10% of the oldest home owners (reference person aged 65 years and over) with a mortgage (table 10.24). The average mortgage outstanding for young home owners was $221,000 compared with $70,000 for the oldest.

For other tenure types, there was much less variation in housing costs across age groups (graph 10.23). In 2007-08, average weekly rents rose from $272 for young households renting privately to $293 for those with a reference person aged 35-44 years, and were progressively lower for older private renters. This pattern largely reflects the need for larger households to rent larger, and often more expensive, dwellings. In 2007-08, couple families with dependent children represented 20% of young private renter households; 34% of those with a reference person aged 35-44 years; and 24% of those with a reference person aged 45-54 years.

Average weekly rents of public renters were less than half those of private renters, starting at $106 for younger households and declining to $88 for the oldest. Owners without a mortgage had by far the lowest and least variable housing costs, averaging $33 per week overall.

Much of the variation in housing costs between households at different life cycle stages is related to differences in tenure patterns. For example, in 2007-08, households with a reference person aged 35-44 years had the highest average weekly housing costs ($330). They also had the highest proportion of owners with a mortgage (54%), the second highest proportion of recent home buyers (29% of all home owners with a mortgage), the second highest average amount of mortgage outstanding ($197,000) and the second highest proportion of private renters (27%) (table 10.24).

Housing costs were on average lower for younger (reference person aged under 35 years) households ($320 per week). Even though this group had the highest proportion of recent home buyers (52%), only 34% of younger households were owners with a mortgage. Those who were owners with a mortgage had the highest average amount of mortgage outstanding ($221,000). This group also had the highest proportion of private renters (56%) and the lowest proportion of owners without a mortgage (3%).

At the other end of the spectrum, the oldest households (with a reference person aged 65 years and over) had the highest proportion of home owners without a mortgage (78%), the lowest proportion of private renters (7%), the highest proportion of public renters (6%), and, for those in this group that had a mortgage, it was the lowest of all age groups ($70,000). Together these factors resulted in this group having by far the lowest average housing costs ($48 per week).

Housing costs decline with age for all family and household types, as does the proportion of household income spent on housing, but to a lesser extent. For example, in 2007-08, the oldest lone-person households paid an average of $49 per week (11% of their gross household income) for housing, while the youngest lone-person households paid $258 (26% of their gross household income) for housing.




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