HOUSING AFFORDABILITY

One measure of housing affordability is a ratio of housing costs to gross household income, also described as a housing affordability ratio. Care should be taken when comparing housing costs to income ratios between different tenure and landlord types, as there are practical data collection limitations to these data. For more information see 'Housing Costs' in the Explanatory notes of this publication.

For owners with a mortgage, the percentage of household income spent on mortgage costs fell from 18% in 2011–12 to 16% in 2015–16. This decrease in housing costs relative to gross household income for mortgagees appears to be driven by an increase in gross household income (which increased from $2,001 in 2011-12 to $2,109 in 2015-16) and a period of relatively low home loan interest rates. Owners without a mortgage spent 3% of their gross household income on housing costs, which has not changed since 2007–08.

Private renters spent 21% of their gross household income on housing costs in 2015–16, not significantly different when compared with 2013–14.

State and territory housing authority renters also spent 21% of their gross household income on housing costs in 2015–16, unchanged from 2013–14.


Over the longer term (1995–96 to 2015–16) there have been significant changes in housing affordability. In 2015–16:

• 75% of households spent 25% or less of their gross household income on housing costs, a decrease from 80% in 1995-96.
• 7% of households spent between 25% and 30% of their gross household income on housing costs, an increase from 6% in 1995-96.
• 12% of households spent between 30% and 50% of their gross household income on housing costs, an increase from 10% in 1995-96.
• 6% of households spent more than 50% of their gross household income on housing costs, an increase from 4% in 1995-96.

HOUSING COSTS TO INCOME RATIOS – STATES AND TERRITORIES

The housing costs as a proportion of gross household income, for each state and territory, are presented in data cube 13.3. These percentages are not uniform across Australia. There are significant differences to the average ratio of housing costs to income between some states and territories when compared with the national average.

For all households, in 2015–16 the housing costs as a proportion of gross household income in Queensland (15%) were significantly higher than the national average (14%) whereas those in South Australia (13%), Tasmania (13%), and Australian Capital Territory (13%) were lower.

The housing costs as a proportion of gross household income for renters in the Northern Territory (18%) were lower than those for all households in Australia (20%).

For owners with a mortgage, the housing costs as a proportion of gross household income were higher in Victoria (17%) than those for all households in Australia (16%) whereas those for the Australian Capital Territory (15%) were lower.


LOWER INCOME HOUSEHOLDS

Lower income households are defined as those containing the 38% of people with equivalised disposable household income between the 3^rd and 40^th percentiles. For more information see the ‘Explanatory Notes’ section of this publication.

Although this group reported lower housing costs on average than all households, their housing costs represented a greater percentage of their gross weekly income. Lower income households with a mortgage paid an average of $345 a week in housing costs, which represented 28% of their gross weekly income.

Similarly, lower income households renting from private landlords paid an average of $322 a week on housing costs, which represented 32% of their gross weekly income.

A common measure of rental stress is to look at the proportion of lower income households paying more than 30% of their income on housing costs. According to this measure, in 2015–16, just over half (51%) of lower income renter households were in rental stress.