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1370.0 - Measuring Australia's Progress, 2002  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 19/06/2002   
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Housing in Australia is generally good, as evidenced by ABS surveys which show that most people live in affordable housing and are generally satisfied with their dwelling.(SEE FOOTNOTE 1) But poor housing is a problem for some groups, especially for Indigenous people living in remote areas.

There is no single headline indicator to show whether housing circumstances have been getting better or worse. The two time series indicators chosen focus on issues of housing affordability and housing suitability (whether or not households have sufficient bedrooms). The affordability indicator, for which data are only available for the period 1994-95 to 1997-98, shows that the proportion of households with housing affordability problems had remained much the same. The housing suitability indicator shows continuous improvement through much of the last two decades.

The extent of homelessness is an associated issue of concern, and crisis accommodation services are often overburdened.(SEE FOOTNOTE 2) But because homelessness is commonly also associated with dysfunctional relationships, and is not usually the result of housing shortages, it is discussed in the commentary Social attachment.


Housing provides people with shelter, security and privacy. Having a suitable place to live is fundamental to people's identity and wellbeing, and there are many aspects to housing that affect the quality of people’s lives. Dwelling attributes, such as their size, number of bedrooms, physical condition, location relative to amenities and services, and their affordability, are all important in this regard. While housing is a key dimension of concern, there is no one indicator that succinctly captures these and other attributes to identify whether people's many needs and desires for suitable housing are increasingly being met or not. Instead the following discusses some limited but important aspects of people’s housing circumstances.


HOUSING AFFORDABILITY PROBLEMS

The amounts people must pay in rent or rates and any mortgage repayments for their dwelling are often substantial. The prevalence of households experiencing housing affordability problems, which points to limitations in the supply of suitable low cost housing, can be measured by assuming that households with lower incomes (as defined in the box below) which pay more than 30% of their income in housing costs will experience such difficulties. Annual data for the period 1994-95 to 1997-98 show that the proportion of all households in such circumstances (i.e. about 11%) had remained much the same. In 1997-98 there were 793,000 households with housing affordability problems. Many of them were paying off a mortgage for their home, but the majority (60%) were households in rented housing.

In 1997-98, lower income households renting their dwelling and paying more than 30% of their income in housing costs accounted for 7% of all households in Australia. This proportion had also remained much the same over the preceding three years.

Households with housing affordability problems(a)
Graph - Households with housing affordability problems(a)


MEASURING HOUSING AFFORDABILITY PROBLEMS

Although there is no nationally recognised standard for identifying households with housing affordability problems, one of the more often used benchmarks has been adopted. This is households with lower incomes (those in the bottom 40% of the income distribution - see details below) and with housing costs above 30% of their disposable income. It should be noted that many higher income households also pay more than 30% of their income on housing costs. These have been excluded from the group identified as having affordability problems because such households often have the discretion to reduce their housing costs by reducing their mortgage repayments or moving to a place with lower costs.

Households in the bottom 40% of the income distribution were identified by ranking all households, from highest to lowest, into equivalised income groups after applying OECD equivalence scales.(SEE FOOTNOTE 3) The use of such scales effectively adjusts to a standard household type the incomes of households of different size and composition which would have different income needs. Having identified the 40% of households with the lowest equivalent incomes, housing costs - including rent, mortgage and rate payments - were calculated as a proportion of the households' unequivalised disposable (after tax) income.


HOUSEHOLDS WITH INSUFFICIENT BEDROOMS

Having insufficient bedrooms is not a problem for most households in Australia: indeed the majority have spare bedrooms. However, the proportion of households with insufficient bedrooms (defined according to community standards of bedroom requirements for different household types - see box below) provides a useful indicator of the extent of housing disadvantage. Looking at changes in the proportion of households with spare bedrooms is also of interest, as growth in the proportion suggests an increase in housing affluence. But it is important to note that such affluence might not always be desirable, as some households may prefer to live in dwellings with fewer bedrooms to suit their lifestyle.

The trends have been favourable. In 1984, 7% of all households lived in dwellings with fewer bedrooms than their expected requirements, but in 1998-99 this proportion had declined to less than 5%. Over the same period, the proportion of households with spare bedrooms (often with two or more spare) rose. Those with at least one spare bedroom increased from 63% to 74% and the proportion with two or more spare bedrooms increased from 26% to 37%.

Changes in household size and composition and in the average number of bedrooms per dwelling help to account for the improvements. For instance, the general decline in the average number of people per household has generally increased the likelihood that households will have spare rooms (because many occupied dwellings were built for the needs of society when families were larger). Also, despite the construction of smaller dwellings to meet the needs of certain people (such as town houses designed for elderly people), the general trend has been to construct substantially bigger dwellings (and probably with more rooms, some of which might be used as bedrooms) than in the past. Between 1990 and 2000, the average size of new private sector dwellings increased by 22% from 189 to 231 m2.


SOME DIFFERENCES WITHIN AUSTRALIA

The quality and costs of dwellings vary greatly across Australia, and can depend on the period in which the dwelling was constructed, the affluence of the communities in which they are located, and the local climate (for example, in Queensland many older dwellings were built using timber, whereas in the colder southern States, brick houses were more common).

Housing standards tend to be lowest in remote area communities, especially among those least able to afford building and maintenance costs. Such costs tend to be higher in remote areas because access to modern building materials and to people with the skills to build high quality dwellings is more limited. Indigenous Australians, particularly those in more remote communities, are widely regarded as having the poorest housing circumstances in Australia. In 1999, one in eight of all dwellings in remote Indigenous communities were temporary dwellings, such as caravans, tin sheds or humpies.(SEE FOOTNOTE 5)

Several other indicators show that housing conditions tend to be poorer among Indigenous Australians irrespective of where they live. For instance, in 1999 13% of all households living in non-remote areas of Australia, and having at least one person aged 15 years and over who identified as being of Aboriginal or Torres Strait Islander origin, needed more bedrooms to adequately accommodate all household members. This compared with 4% for other households. (SEE FOOTNOTE 6) Households containing Indigenous Australians 15 years or over were also more likely to report that their dwelling was in high need of repair (20%) compared with other households (7%).(SEE FOOTNOTE 6)

Households with insufficient or spare bedrooms(a)
Graph - Households with insufficient or spare bedrooms(a)


IDENTIFYING REQUIREMENTS FOR BEDROOMS

The criteria used to identify bedroom requirements for households are, in the absence of any widely accepted Australian standard, based on the Canadian National Occupancy Standards. A household's bedroom requirements are assessed as follows:
  • there should be no more than two persons per bedroom;
  • children less than 5 years of age of different sexes may reasonably share a bedroom;
  • children 5 years of age or older of 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 18 years or over should have a separate bedroom, as should parents or couples.

Of course, these assumptions are open to debate (SEE FOOTNOTE 4).


LINKS TO OTHER DIMENSIONS OF PROGRESS

Housing conditions and costs are influenced by many factors, but most particularly the affluence of households. A poor standard of housing is often associated with problems in other areas of concern such as health, economic disadvantage, crime and low levels of social attachment.(SEE FOOTNOTE 7) Housing development is often seen as important to the economy and is part of national wealth. However, new housing development sometimes involves clearing native vegetation, with associated loss of biodiversity.

See also the commentaries National income, National wealth, Economic disadvantage and inequality, Health, Social attachment, and Land clearance.


FOOTNOTES

1 Results published from the 1994 National Housing Survey (see Australian Bureau of Statistics 1995, Housing characteristics, costs and conditions, 1994, Cat. no. 4162.0, ABS, Canberra) showed that 86% of households were satisfied with their dwelling, 12% were neither satisfied or dissatisfied and only a small proportion (about 3%) were dissatisfied.

2 For details of unmet demand for crisis accommodation services, see Australian Institute of Health and Welfare (AIHW) 2001, SAAP National Data Collection: Annual Report, 2000-2001, Australia, AIHW Cat. no. HOU61 (SAAP NDCA Report: Series 6), AIHW, Canberra.

3 The equivalence scale used to obtain equivalised incomes is the same as that used for the income indicators presented in the commentary Economic disadvantage and inequality. For further details see footnote 2 of that section.

4 Increasingly, the norm in Australia is to give all children their own bedroom, regardless of age or sex. And in older households, rooms that were once bedrooms (and still contain a bed) are often used for other purposes (e.g. computer rooms, studies), despite still being reported as bedrooms in censuses or surveys. At a more fundamental level, the standard only addresses suitability in relation to sleeping arrangements. It does not necessarily provide insight into general housing standards, which might also take account of the size of bedrooms, or the number and size of other rooms in a dwelling.

5 Australian Bureau of Statistics 2000, "Housing in remote Aboriginal and Torres Strait Islander communties", in Australian Social Trends, 2000, Cat. no. 4102.0, ABS, Canberra.

6 See Australian Bureau of Statistics 2001, "Aboriginal and Torres Strait Islander housing in non-remote areas", in Australian Social Trends, 2001, Cat. no. 4102.0, ABS, Canberra; and Australian Bureau of Statistics 2001, Australian Housing Survey: Aboriginal and Torres Strait Islander Results, Cat. no. 4712.0, ABS, Canberra.

7 Australian Bureau of Statistics 2001, Measuring Wellbeing: Frameworks for Australian Social Statistics, Cat. no. 4160.0, ABS, Canberra.

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