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1370.0 - Measures of Australia's Progress, 2010  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 15/09/2010   
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Housing

HOUSING GLOSSARY

Acceptable dwelling standard

For the purposes of this section, dwellings are regarded as being of an acceptable standard if they have four working facilities (for washing people, for washing clothes/bedding, for storing/preparing food, and sewerage) and with no more than two major structural problems (major cracks in walls or floors, major plumbing problems, and wood rot or termite damage).

Affordable homes (home buyers)

For the purposes of this section, the proportion of homes sold that are affordable to moderate income households is determined based on the following assumptions:

  • Low and moderate income households are those with equivalised disposable household incomes (EDHI) in the bottom three quintiles, calculated on a state-by-state basis, and separately for capital city and balance of state.
  • The indicator is calculated for those at the top of the moderate income range, i.e. at the top of third quintile, in each of the state by capital city/balance of state regions.
  • Gross household income for those households at the top of the third quintile is measured as the median gross household income for all households in the EDHI percentile range 59-61.
  • Homes are assessed to be affordable when the household spends no more than 30% of their gross income on mortgage payments (including both interest and capital repayments).
  • Mortgage payments are calculated using: the standard monthly variable interest rate series published by the Reserve Bank of Australia, averaged over the year; assumed 10% deposit on the full purchase price; and repayments over a 25 year loan contract.
    The number of affordable homes is then taken as a proportion of the number of households within the population on a state-by-state basis, and separately for capital city and balance of state.

    Affordable homes (home buyers) - per 1,000 households

    The number of homes sold that are affordable to moderate income households per 1,000 households is calculated by determining the number of homes sold that are affordable to moderate income households based on the same assumptions as outlined above in 'Affordable homes (home buyers)'. The calculation is based on the number of homes affordable divided by the number of households within the population instead of the number of homes sold.

    Affordable homes (home buyers) - states and territories

    For state and territory analysis of housing affordability for home buyers, the assumptions used are the same as those outlined above in 'Affordable homes (home buyers)'. However, for the Northern Territory and the Australian Capital Territory, due to the smaller sample size in the 59-61 EDHI percentile range, gross household income is measured as the median gross household income for all households in the territory in the EDHI percentile range 55-65 for 2005-06.

    Canadian National Occupancy Standard

    A standardised measure of housing utilisation and overcrowding. This measure assesses a household's bedroom requirements by specifying that:
  • there should be no more than two people per bedroom;
  • a household of one unattached individual may reasonably occupy a bed-sit (i.e. have no bedroom);
  • couples and parents should have a separate bedroom;
  • children less than five years of age, of different sexes, may reasonably share a bedroom;
  • children five years of age or over, of the opposite sex, should not share a bedroom;
  • children less than 18 years of age and of the same sex may reasonably share a bedroom; and
  • single household members aged 18 years or over should have a separate bedroom.

    Commonwealth Rent Assistance (CRA)

    Where applicable, Commonwealth Rent Assistance (CRA) has been excluded from the housing costs and gross income of recipients. CRA is a non-taxable income supplement paid through Centrelink to individuals and families who rent in the private rental market. It is only paid to recipients of another government benefit or pension, and is paid in conjunction with that other benefit. In this section, CRA payments have been modelled based on Centrelink eligibility requirements. Characteristics collected in the Survey of Income and Housing, such as the family and household composition, ages, type of government payments received, currently weekly income from government allowances, rental payments and the tenure and landlord details, are used to calculate the eligibility and amount of CRA for each income unit within the survey sample.

    Disposable income

    Gross income less income tax, the Medicare levy and the Medicare levy surcharge i.e. remaining income after taxes are deducted, which is available to support consumption and/or saving. Income tax, Medicare levy and the Medicare levy surcharge are imputed based on each person's income and other characteristics as reported in the survey. Disposable income is sometimes referred to as net income.

    Equivalised disposable household income

    Disposable household income adjusted using an equivalence scale. For a lone person household it is equal to disposable household income. For a household comprising more than one person, it is an indicator of the disposable household income that would need to be received by a lone person household to enjoy the same level of economic wellbeing as the household in question. For further information see Appendix 3 in ABS Household Income and Income Distribution, Australia, 2007-08 (cat. no. 6523.0).

    Family composition

    Classifies households into three broad groupings based on the number of families present (one family, multiple family, and non-family). One family households are further disaggregated according to the type of family (such as couple family or one parent family) and according to whether or not dependent children are present. Non-family households are disaggregated into lone person households and group households.

    Gross income

    Income from all sources, whether monetary or in kind, before income tax or the Medicare levy are deducted.

    House price index (HPI)

    The HPI measures price change of the stock of established houses over time. While other price indexes produced by the ABS provide a weighted average of the price changes in a group of goods or services, the HPI specifically measures prices of established, detached houses in each of the capital cities in Australia. Separate indexes are produced for each capital city, and these indexes are combined to produce a weighted average index of the eight capital cities. For more detailed information on house price indexes than is provided in these explanatory notes refer to the ABS Information paper, House Price Indexes: Concepts, Sources and Methods, Australia, 2009 (cat. no. 6464.0).

    Housing costs

    Housing costs for the purpose of the headline indicator and rental stress indicator include rent payments and rates payments (general and water).

    Housing costs as a proportion of income

    The total weekly housing costs of a group are divided by the total weekly income of that group, and expressed as a percentage. Households with nil or negative total income are not included in this calculation.

    Indigenous
    Refers to people who identified themselves, or were identified by another household member, as being of Aboriginal and/or Torres Strait Islander origin.

    Low and moderate income households (home buyers)

    Low and moderate income households are those with equivalised disposable household incomes (EDHI) in the bottom three quintiles, calculated on a state-by-state basis, and separately for capital city and balance of state. The indicator is calculated for those at the top of the moderate income range, i.e. at the top of third quintile, in each of the state by capital city/balance of state regions. Gross household income for those households at the top of the third quintile is measured as the median gross household income for all households in the EDHI percentile range 59-61.

    For state and territory analysis of housing affordability for home buyers, the assumptions used are the same as those outlined above, however, for the Northern Territory and the Australian Capital Territory, due to the smaller sample size in the 59-61 EDHI percentile range, gross household income is measured as the median gross household income for all households in the territory in the EDHI percentile range 55-65 for 2005-06.

    See also 'Affordable homes (home buyers)'.

    Low income rental affordability

    Housing costs as a proportion of gross household income for low income renters.

    Low income renters

    For the housing section, low income renter households are defined as the 40% of households with equivalised disposable household income (excluding CRA) at or below the 40th percentile, calculated for capital city and balance of state, on a state-by-state basis. See also 'Commonwealth Rent Assistance (CRA)'.

    Owner (of a dwelling)

    A household in which at least one member owns the dwelling in which the household members usually reside. Owners are divided into two classifications - owners without a mortgage and owners with a mortgage. If there is any outstanding mortgage or loan secured against the dwelling the household is an owner with a mortgage. If there is no mortgage or loan secured against the dwelling the household is an owner without a mortgage.

    Overcrowding

    See 'Canadian National Occupancy Standard'.

    Private renter

    A household paying rent to any landlord other than a state or territory housing authority/trust (i.e. renting from a real estate agent, a parent or other relative not in the same household or another person not in the same household).

    Public renter

    A household paying rent to a state or territory housing authority/trust.

    Quintiles

    Groupings that result from ranking all households or people in the population in ascending order according to some characteristic, such as their household income, and then dividing the population into five equal groups, each comprising 20% of the estimated population. In this publication the quintiles are formed by ranking people by their equivalised disposable household income.

    Rental stress

    A renter household is in rental stress with its housing costs (excluding CRA) are more than 30% of the gross household income (excluding CRA).

    Tenure type

    The nature of a household's legal right to occupy the dwelling in which they usually reside. Tenure is determined according to whether the unit owns the dwelling outright, owns the dwelling but has a mortgage or loan secured against it, is paying rent to live in the dwelling or has some other arrangement to occupy the dwelling.
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