Housing

The Survey of Income and Housing (SIH) contains a wide range of variables that directly relate to many aspects of people's housing. These include tenure, dwelling structure, and number of bedrooms. Some other housing concepts are outlined in more detail below.

Detailed housing information from the SIH are published in Housing Occupancy and Costs, Australia (cat. no. 4130.0).

Housing costs are regular outlays made by household members in providing shelter for themselves. The data collected on housing outlays in the SIH are limited to major outlays on housing, such as mortgage repayments, repayments of unsecured loans for housing purposes, rent, property and water rates, and body corporate fees. Only payments that relate to the dwelling occupied by the household at the time of interview are included. The ABS publication Housing Occupancy and Costs, Australia presents a measure of housing costs defined simply as the sum of rent payments; rate payments (water and general); and mortgage or unsecured loan payments (if the initial purpose of the loan was primarily to buy, add, or alter the occupied dwelling).

There are a number of limitations with the housing costs information obtained in the SIH, due to practical data collection considerations. These limitations should be especially borne in mind when comparing the housing costs of different tenure and landlord types, i.e. when comparing the costs of owner occupiers with the costs of renting households, and when comparing the costs of households renting from state and territory housing authorities with the costs of other renters.

• Some households are reimbursed some or all of their housing costs. Rent Assistance (RA), paid by the Australian Government to qualifying recipients of income support payments is an important type of reimbursement of relevance to these statistics.
• Mortgage repayments made by owners with a mortgage include both the interest component and the principal component. For some purposes it may be more appropriate to consider repayments of principal as a form of saving rather than as a recurrent housing cost, as it reflects the purchase of a housing asset by increasing the equity in the property held by the household and is an addition to the wealth of the occupants.
• A fuller measure of housing costs would include a range of outlays not collected in the SIH but which are necessary to ensure that the dwelling can continue to provide an appropriate level of housing services. These include body corporate fees, repairs, maintenance and dwelling insurance, and are costs that tend to be incurred by owner occupier households but not by renting households.

For further information on this topic, see the Housing Cost Measures appendix to the 'methodology' tab of Housing Occupancy and Costs, Australia.

Housing costs are often a major component of total living costs. Therefore housing costs are often analysed in relation to total income, sometimes referred to as an affordability ratio. However, the quality of these measures are subject to the limitations of housing cost estimates obtained in the SIH that are described in the previous paragraph. Housing affordability ratios derived from the SIH in particular are affected by the inclusion of RA in the value of income collected.

To illustrate the issue discussed above, consider two households that are renting their dwellings. Both receive government pensions of $400 per week. One rents from a public housing authority and pays rent of $100 per week. The other pays $135 rent per week to a private landlord and receives RA of $35. In Housing Occupancy and Costs, the housing costs of the latter household would be recorded as $135 and their income would be recorded as $435. The couple renting from the public housing authority has a housing costs to income ratio of 25%. The housing costs to income ratio for the latter household would be 31%. If RA receipts are subtracted from housing costs and income, the housing costs to income ratio for the latter couple is also 25%, demonstrating that there is no substantive difference between the housing costs or income situation of the two couples. This issue is also of concern when considering changes in affordability ratios over time, since there has been a shift from providing public housing to providing RA as a means of supplying affordable housing to low income people.

While housing costs can be a major component of total living costs, the difference between the housing costs of a larger household and a smaller household would not be expected to be as great as the difference in many other costs, such as food or clothing. In other words, larger households can be expected to experience economies of scale in the supply of housing. This means that if a larger household and smaller household both have the same standard of living, it could be expected that on average the larger household will have a lower housing cost to income ratio. Therefore relatively high housing cost to income ratios are more of a concern with respect to larger households than smaller households. This should be borne in mind when comparing ratios across different household sizes.

In comparing households' housing costs with their income, it should be noted that households have a variety of housing preferences. Some people may choose to live in an area with high land values because it is close to their place of employment and therefore they have lower transport costs. Some people choose to incur relatively high housing costs because they prefer a relatively high standard of housing to other consumption or investment choices. High mortgage repayments might reflect a choice to purchase a relatively expensive home, or pay off a mortgage relatively rapidly, as a form of saving.

One way of examining housing affordability is to look at households whose spending on housing is likely to impact on their ability to afford other living costs such as food, clothing, transport and utilities. A common threshold applied is the proportion of households spending more than 30% of their income on housing costs.

Higher income households have greater capacity to spend a high proportion of their income on housing without impacting their ability to meet other living costs. Accordingly, a 30% housing costs threshold is commonly applied to those households whose equivalised disposable household income falls in the bottom 40% of Australia’s income distribution, referred to as lower income households. This is commonly referred to as the '30/40 rule' of housing affordability. Lower income households that spend more than 30% of their gross income on housing costs are sometimes referred to as being in ‘housing stress’.

Some affordability measures, including the 30/40 rule, may exclude households that report nil or negative income or those reporting extremely low incomes, such as those in the bottom 2% of the equivalised disposable household income distribution, as data suggests this group includes households with temporarily low or irregular incomes, or accumulated wealth that supports their consumption.

Measures of housing affordability are often restricted to renters as this population group is of particular interest to housing policy makers. Rental Affordability, Lower Income Renter Households, National Housing and Homelessness Agreement basis' is used to calculate the official government measure of housing affordability. Among other things, this basis subtracts RA from estimates of income and housing costs, and produces a different measure to the affordability statistics published throughout the remainder of Housing Occupancy and Costs. 

The SIH 2019–20 included additional housing topics to enable reporting of the broader housing circumstances of households. The ABS collects additional information on housing in the SIH every six years. The additional information was collected in 2007–08 and published in Housing Mobility and Conditions, 2007–08 (cat. no. 4130.0.55.002). For 2013–14, the additional housing content was published in an additional data cube available with Housing Occupancy and Costs, Australia (cat. no. 4130.0). 

The additional housing topics selected for inclusion in 2019–20 SIH, include:
Housing mobility:

• Number of years lived in current dwelling
• Number of times moved in last 5 years
• Structure of previous dwelling
• Geographical area of previous dwelling
• Tenure type of previous dwelling
• Previous landlord type or provider of rent free dwelling
• Reasons for last move
• Reasons likely to move in next 12 months
• Barriers to moving

Housing condition and dwelling characteristics:

• Types of major structural problems
• Number of major structural problems
• Sources of water for dwelling
• Sources of energy used in dwelling
• Satisfaction with current dwelling

Home purchase for first home buyers

• Source(s) of home deposit
• Size of home deposit
• Whether received monetary assistance to purchase dwelling

Household finances of owners with a mortgage

• Whether have refinanced loan for property in the last 2 years
• Reason(s) for refinancing

Rental arrangements and the affairs of renters

• Length of lease
• Amount of bond paid
• Whether have been refused rental accommodation in last 5 years
• Number of years that respondent has rented (in all rentals) - recent continuous

The concept of housing utilisation applied in the SIH is based upon a comparison of the number of bedrooms in a dwelling with a series of household demographics including the number of usual residents, their relationship to one another, age and sex. There is no single standard measure of housing utilisation. However, the Canadian National Occupancy Standard (CNOS) is applied in the SIH and is widely used internationally.

The CNOS is sensitive to both household size and composition. The measure assesses the bedroom requirements of a household by specifying that:

• there should be no more than two persons per bedroom
• children less than five years of age of different sexes may reasonably share a bedroom
• children less than 18 years of age and of the same sex may reasonably share a bedroom
• single household members 18 years and over should have a separate bedroom, as should parents or couples
• a lone person household may reasonably occupy a bed sitter.

The CNOS variable compares the number of bedrooms required with the actual number of bedrooms in the dwelling. Households living in dwellings where this standard cannot be met are considered to be overcrowded.