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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 costs

HOUSING COSTS

For most Australians, whether buying or renting their home, the provision of adequate housing for themselves and their families involves substantial ongoing expenditure throughout much of their lives. Housing costs are often the largest regular expenses to be met from a household's current income.

The housing costs measure compiled from the Survey of Income and Housing is defined as the sum of;

  • rent payments,
  • rates payments (general and water), and
  • mortgage or unsecured loan payments, if the initial purpose is primarily to buy, add to or alter the dwelling.

In 2007-08, owners without a mortgage had the lowest housing costs, averaging $33 per week or 2% of gross household income. In contrast, owners with a mortgage had the highest housing costs, averaging $384 per week or 18% of their gross household income.

Among renters, housing costs averaged $105 per week for households renting from a state/territory housing authority and more than double that ($267) for households renting from a private landlord. The effect of Commonwealth Rent Assistance (CRA) should be taken into consideration when comparing the housing costs of private renters with those of other households.

Eligible social security recipients may receive a non-taxable income supplement in the form of CRA if the private rent they pay is above a threshold level. It is estimated that CRA effectively lowers the total housing costs by 10% for all private renters, and by 25% for those private renters who receive CRA. For more information see Housing assistance and Housing Occupancy and Costs, Australia (4130.0).

For the majority of owner and renter households, housing costs represented less than 25% of gross household income, but for some it was more than 50%. In 2007-08, 8% of private renters and owners with a mortgage spent more than half of their gross income on housing (table 10.9).

10.9 ALL HOUSEHOLDS, Housing costs by tenure and landlord type - 2007-08

Proportion of households whose
housing costs represented(a)

Average weekly housing costs
Average housing
costs as a proportion
of gross household
income(a)
25% or less
of gross household
income
More than 50%
of gross household
income
Number of
households
$
%
%
%
'000

Owner without a mortgage
33
2
98.1
1.1
2 679.2
Owner with a mortgage
384
18
68.4
7.8
2 835.2
Renter - state/territory housing authority
105
19
69.9
*4.3
365.1
Renter - private landlord
267
18
65.0
7.6
1 929.5
Total renters(b)
237
17
66.2
6.9
2 399.9
All households(c)
216
13
78.2
5.2
8 077.3

* estimate has a relative standard error of 25% to 50% and should be used with caution
(a) Excludes households with nil or negative total income.
(b) Includes other landlord types.
(c) Includes other tenure type.
Source: ABS Housing Occupancy and Costs, Australia, (4130.0).


Between 1994-95 and 2007-08 owners with a mortgage experienced a $111 increase in average weekly housing costs, after adjustment for inflation (graph 10.10). As a proportion of gross household income, housing costs of owners with a mortgage have ranged between 19% and 17% over this time (graph 10.11).

For other tenure types, changes in weekly housing costs were smaller with an overall increase of $68 for private renters and $17 for public renters between 1994-95 and 2007-08. For private renters, this represented a decline in the proportion of income spent on housing costs, from 20% to 18% - but for public renters it represented an increase from 17% in 1994-95 to 19% in 2007-08 (graph 10.11). As noted above, the effect of CRA receipts should be taken into consideration when making comparisons of housing costs of private renters with those of other tenure or landlord types.

10.10 Average real weekly housing costs(a), By tenure and landlord type
Graph: 10.10 Average real weekly housing costs(a), By tenure and landlord type


10.11 Housing costs as a proportion of income, ^By tenure and landlord type (a)
Graph: 10.11 Housing costs as a proportion of income, ^By tenure and landlord type (a)


In 2007-08, households in Sydney and Canberra had the highest average weekly housing costs - $292 and $270 respectively (graph 10.12). In each of these cities, housing costs averaged more than $455 per week for owners with a mortgage; $325 per week for private renters; and $110 per week for public renters. At $160 per week, average housing costs in Hobart were just 55% of the Sydney average, and the lowest of all the capital cities.
In all states, average housing costs were higher in the capital city than in the rest of the state. The greatest difference was in New South Wales, with Sydney housing costs 88% higher than in the rest of the state. In contrast, Brisbane housing costs were 19% higher than in the rest of Queensland, which had the highest non-capital city housing costs in Australia. This is influenced by Queensland's high level of urban settlements outside of Brisbane.

10.12 Average weekly housing costs, ^By state and territory - 2007-08
Graph: 10.12 Average weekly housing costs, ^By state and territory—2007–08


Differences in average housing costs between regions reflect differences in property values (see Home buyers), rental prices and tenure patterns (see Home owners and renters). In 2007-08, the median value of dwellings in Sydney ($550,000) was more than 70% higher than that of Hobart ($310,000), as was the mean amount of mortgage outstanding ($243,000 compared with $136,000). Consequently, average weekly housing costs for home owners were higher in Sydney than in Hobart, particularly for owners with a mortgage ($501 compared with $321) (table 10.13). Also, private rents in Sydney were 60% higher than in Hobart. The proportion of Sydney households renting privately was also higher (28% compared with 16%) further contributing to the overall difference in average housing costs between Sydney and Hobart.

Household income also varies between regions, and when housing costs are expressed as a proportion of income, regional differences are moderated to some extent. For example, housing costs for all capital cities combined were 44% higher than in the rest of Australia ($244 compared with $170) but the proportion of income spent on housing costs was no higher (both 13%).

10.13 Capital city households, Housing costs by tenure and landlord type - 2007-08

Sydney
Melbourne
Brisbane
Adelaide
Perth
Hobart
Darwin
Canberra(a)
Eight
Capital
Cities
Balance of
Australia

AVERAGE WEEKLY HOUSING COSTS ($)

Owner without a mortgage
37
31
34
30
28
31
31
41
33
33
Owner with a mortgage
501
380
421
336
398
321
379
458
424
310
State/territory housing authority
111
109
92
109
100
88
126
121
107
100
Private landlord
327
279
291
225
256
204
305
337
291
218
Total renters(b)
146
217
183
124
107
117
156
175
165
195
Total(c)
292
217
246
191
222
160
259
270
244
170

AVERAGE HOUSING COSTS AS A PROPORTION OF GROSS HOUSEHOLD INCOME (%)

Owner without a mortgage
2
2
2
2
2
2
1
2
2
3
Owner with a mortgage
19
18
17
17
18
18
15
18
18
17
State/territory housing authority
22
19
17
18
17
18
26
22
19
18
Private landlord
19
17
19
18
15
16
18
17
18
18
Total renters(b)
16
21
19
12
12
29
8
9
18
17
Total(c)
19
17
19
18
16
17
18
16
13
13

(a) All ACT owner and renter households.
(b) Includes other landlord types.
(c) Includes other tenure types.
Source: ABS Housing Occupancy and Costs, Australia, (4130.0).





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