4130.0.55.001 - Housing Occupancy and Costs, Australia, 2002-03  
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1 This publication presents the housing costs and characteristics of households and persons resident in private dwellings in Australia, compiled from the 2002-03 and earlier Surveys of Income and Housing (SIH), previously known as the Survey of Income and Housing Costs. The survey collected information on sources of income, amounts received, housing costs and characteristics of persons aged 15 years and over resident in private dwellings throughout non-sparsely settled areas of Australia.

2 The SIH was conducted continuously from 1994-95 to 1997-98, and then in 1999-2000, 2000-01, 2002-03 and 2003-04. The 2002-03 SIH included an expanded sample of 10,000 households (up from about 7,000 households in earlier years). From 2003-04, the SIH is being conducted every second year, with a sample of about 11,000 households.

3 Consistent with previous Household Expenditure Surveys (HESs), the 2003-04 HES includes more detailed housing cost information than available in the SIH. Other surveys conducted by the Australian Bureau of Statistics (ABS) which covered housing were:

  • Survey of Health Conditions, the Aged and Housing, 1988;
  • Survey of Income and Housing Costs and Amenities, 1990;
  • Australian Housing Survey, 1994 and 1999.

4 Care should be taken when comparing data from the different sources due to the different methodologies used in these surveys.

5 The 2000-01 SIH introduced a range of methodological and presentational changes primarily aimed at improving the measurement of changes in income distribution. Details are available in Household Income and Income Distribution, Australia, 2000-01, cat. no. 6523.0.


6 The concepts and definitions relating to statistics of housing costs are described in the following section. Other definitions are included in the Glossary.


7 The household is the basic unit of analysis in this publication. This may be;
  • a group of two or more persons living in the same dwelling, who make common provision for food or other essentials for living; or
  • one person who makes provision for his/her own food or other essentials for living without combining with any other person.

8 The use of the household as the basic unit of analysis in this publication requires that the estimates of income and housing costs are based on the sum of the income and housing costs of all household members. Intra-household transfers, however, are excluded. For example, if one member of the household were to pay board to another member of the same household then this is not considered as an increase in the amount of income or housing costs of the household. If such transfers were to be included there would be double counting.

Housing costs

9 Housing costs are the recurrent outlays by household members in providing for their shelter. The data collected on housing outlays in the SIH are limited to major cash outlays on housing, that is, mortgage repayments and property rates for owners, and rent. Mortgage, rent and rates payments are shown in this publication as weekly equivalents.

10 Only payments which relate to the dwelling occupied by the household at time of interview, that is, a respondent's usual place of residence, are included. Housing costs only include mortgage/loan payments if the purpose of the loan at the time it was initially taken out was primarily to buy, or build, or add to or alter the occupied dwelling.

11 Many users of housing costs information require a distinction, within mortgage repayments, between the interest component and the principal or capital component. The latter 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 occupant. For practical purposes, the payments of interest and principal on loans and mortgages were not collected separately in this survey. (Some data are available from the HES on the split between interest and capital repayments on mortgages. See Appendix 1.)

12 At a broader level, housing costs might also include a range of other outlays which are necessary to ensure that the dwelling can continue to provide an appropriate level of housing services. These include repairs, maintenance and dwelling insurance. For some other purposes, the cost of providing utilities such as electricity and water, may also be required. Although such information is not available from this survey, the HES provides detailed information on the expenditure by households on a wide range of goods and services, and readers are referred to publications from that survey for further information (see paragraph 61 below for references).

Housing stress

13 Housing costs can be a major component of total living costs. Some people pay high rent or mortgage repayments, especially if they live in areas with high land values. Others have smaller rent or mortgage repayments because, for example, they live in subsidised housing or areas with relatively low property prices, or have relatively small mortgages. And some own their homes outright (their housing costs are confined mainly to rate payments and repairs).

14 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 instead of other consumption possibilities. High mortgage repayments might reflect a choice to purchase a relatively expensive home, or pay off a mortgage relatively rapidly, as a form of investment. In any case, all repayments of mortgage principal are additions to the wealth of the household. While there is no nationally recognised standard for identifying households whose high housing costs are likely to be contributing to relatively low standards of living, in this publication one of the more common approaches to estimating people experiencing housing stress is broadly followed.

15 People are often defined as having housing stress if they have both relatively high housing costs and their income falls in the bottom 40% of the income distribution. For this publication, the housing stress measure includes those with incomes between the bottom 10% and bottom 40% of the distribution of equivalised disposable household income. As explained below in paragraph 24, the incomes of many of the people falling into the lowest decile are not an appropriate indicator of the economic resources available to them. It is likely that many of them would inappropriately be regarded as in housing stress, were they to be included here. Relatively high housing costs are those above 30% of gross household income (non-equivalised). Many higher income households pay more than 30% of their income on housing. They are excluded from the housing stress group because they often have more discretion to reduce their housing costs by lowering their mortgage repayments or moving to a cheaper dwelling. Note that here housing affordability relates to ongoing payments actually being made for housing, not the initial purchase price of dwellings.

16 One drawback of this measure of housing stress is the inconsistent treatment of public housing renters compared to renters who receive private rent assistance as part of their government benefit income. Public housing renters pay a market rent that is capped at a low proportion (say 25%) of the renter's income. Therefore, the affordability ratio of housing costs to income for these renters cannot rise above say, 25%, and they will never be assessed as having housing stress under the common definition used for this analysis. Rather than a discounted public rent, a private renter receiving government benefits may also receive private rent assistance as a component of their government benefits. This difference in support arrangements can result in a significant difference in assessing housing stress. For example, consider a private renter receiving rent assistance whose income after deducting housing costs is the same as that of a public renter receiving subsidised housing of the same quality. Both renters can be assumed to have the same standard of living and the same degree of actual housing stress. But the private renter is recorded as having higher income and higher housing costs, resulting in a higher ratio of housing costs to income which may well result in only the private renter being measured as having housing stress. This anomaly is of particular concern when considering changes in housing stress over time, since there has been a shift from providing public housing to providing private rent assistance as a means of providing affordable housing to low income people.

Tenure type and landlord type

17 The concept of housing tenure is based on the type of legal right of the occupant to the dwelling. Tenure is determined according to whether the household 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.

18 Owners are divided into two categories - owners with mortgages, and owners without mortgages. A household's tenure type is owner with a mortgage if the dwelling has a mortgage or loan with purpose to buy, build, add to or alter the dwelling. This mortgage or loan may have been initially obtained primarily for either the purchase or the building of the dwelling, or for undertaking alterations or additions, or for some other purpose such as the purchase of a vehicle or an investment property. However, mortgage payments where the initial purpose of the loan was not primarily for housing are not treated as housing costs. A household's tenure type is owner without a mortgage if there are no loans or mortgages secured against the dwelling.

19 Renters are occupants who pay money as rent to another person or organisation, referred to as the landlord, in return for being allowed to occupy the dwelling. Renters can be further classified according to type of landlord. The landlord may be a relative or an unrelated person in another dwelling or can be a real estate agency, a public housing authority, a community organisation, a trust, or an employer.


20 Income refers to regular and recurring cash receipts from employment, investments and transfers from government, private institutions and other households. Gross income is the sum of the income from all these sources before income tax and the Medicare levy have been deducted.

21 Sources from which income may be received include:
  • wages and salaries (whether from an employer or own corporate enterprise)
  • profit/loss from own unincorporated business (including partnerships)
  • investment income (interest, rent, dividends, royalties)
  • government cash transfers (pensions, allowances, benefits)
  • private cash transfers (e.g. superannuation, regular workers' compensation, income from annuities and child support).

22 Receipts which are excluded from income because they are not regular or recurring cash payments include the following:
  • income in kind including employee benefits such as the provision of a house or a car
  • employer contributions to pension and superannuation funds
  • capital transfers such as inheritances and legacies, maturity payments on life insurance policies, lump sum compensation for injuries or other damage
  • capital gains and losses.

23 The aged persons' savings bonus and self-funded retirees' supplementary bonus, paid as part of the introduction of The New Tax System in 2000-01, are regarded as capital transfers as they were designed to help retired people maintain the value of their savings and investments following the introduction of the GST.

24 While income is generally a good indicator of economic wellbeing, there are some circumstances which present particular difficulties. Some households report extremely low and even negative income in the SIH, which places them well below the safety net of income support provided by social security pensions and allowances. Households may underreport their incomes in the SIH at all income levels, including low income households. However, households can correctly report low levels of income if they incur losses in their unincorporated business or have negative returns from their other investments. Studies of income and expenditure reported in the 1998-99 ABS Household Expenditure Survey (HES) have shown that such households in the bottom income decile and with negative gross incomes tend to have expenditure levels that are comparable to those of households with higher income levels (and slightly above the average expenditures recorded for the fifth decile), indicating that these households have access to economic resources, such as wealth, which are not measured in the SIH, or that the instance of low or negative income is temporary, perhaps reflecting business or investment start up. Other households in the bottom income decile in the 1998-99 HES had average incomes at about the level of the single pension rate, were predominately single person households, the average age of the reference person was 53 years, and their principal source of income was largely government cash benefits. But on average, these households also had expenditures above the average of the households in the second decile, which is not inconsistent with the use of assets to maintain a higher standard of living than implied by their incomes alone. Therefore it can be reasonably concluded that most are unlikely to be suffering extremely low levels of economic wellbeing, and income distribution analysis may lead to inappropriate conclusions if such households are included. For this reason, tables showing statistics classified by income quintile include a supplementary category comprising the second and third deciles, which can be used as an alternative to the lowest income quintile. (For an explanation of quintiles and deciles, readers are referred to Appendix 1 in Household Income and Income Distribution, Australia, 2002-03, cat. no. 6523.0.)

Weekly income

25 Income is collected using a number of different reporting periods, such as the last financial year for own business and property income, and the usual payment for a period close to time of interview for wages and salaries, other sources of private income and government cash transfers. The income is divided by the number of weeks in the reporting period. Estimates of weekly income in this publication therefore do not refer to a given week within the reference year of the survey.

Equivalised disposable income

26 For quintile analysis in this publication, gross income (as described in the previous paragraphs) is adjusted in two ways to facilitate the comparison of economic wellbeing between households. First, disposable income is derived by deducting estimates of personal income tax and the Medicare levy from gross income. Disposable income better represents the economic resources available to meet the needs of households.

27 Equivalence scales are used to adjust the disposable incomes of households in a way that enables the analysis of the relative wellbeing of people living in households of different size and composition. For example, it would be expected that a household comprising two people would normally need more income than a lone person household if all the people in the two households are to enjoy the same material standard of living. Adopting a per capita analysis would address one aspect of household size difference, but would address neither compositional difference (i.e. the number of adults compared with the number of children) nor the economies derived from living together.

28 When household income is adjusted according to an equivalence scale, the equivalised income can be viewed as an indicator of the economic resources available to a standardised household. For a lone person household, it is equal to income received. For a household comprising more than one person, equivalised income is an indicator of the household income that would be required by a lone person household in order to enjoy the same level of economic wellbeing as the household in question.

29 The equivalence scale used in this publication was developed for the Organisation for Economic Co-operation and Development and is referred to as the 'modified OECD' equivalence scale. It is widely accepted among Australian analysts of income distribution. This scale allocates 1.0 point for the first adult (aged 15 years or older) in a household; 0.5 for each additional adult; and 0.3 for each child. Equivalised household income is derived by dividing total household income by the sum of the equivalence points allocated to household members. For example, if a household received combined gross income of $2,100 per week and comprised two adults and two children (combined household equivalence points of 2.1), the equivalised gross household income for each household member would be calculated as $1,000 per week.

30 For more information on the use of equivalence scales, readers are referred to Appendix 3 in Household Income and Income Distribution, Australia, 2002-03, cat. no. 6523.0.

Person and household data

31 In this publication, the income quintiles and deciles are calculated with respect to persons, including children. Such measures are sometimes known as person weighted estimates. For further information readers are referred to Appendix 1 in Household Income and Income Distribution, Australia, 2002-03, cat. no. 6523.0. Nevertheless, as most of the relevant characteristics of persons relate to their household circumstances, most of the tables in this publication primarily describe households.


Scope and coverage

32 The survey collects information by personal interview from usual residents of private dwellings in urban and rural areas of Australia, covering about 98 per cent of the people living in Australia. Private dwellings are houses, flats, home units, caravans, garages, tents and other structures that are used as places of residence at the time of interview. Long-stay caravan parks are also included. These are distinct from non-private dwellings which include hotels, boarding schools, boarding houses and institutions. Residents of non-private dwellings are excluded.

33 The survey also excludes:
  • households which contain members of non-Australian defence forces stationed in Australia
  • households which contain diplomatic personnel of overseas governments
  • households in remote and sparsely settled areas of the Northern Territory, accounting for about 20% of the population in the Northern Territory.

Sample design

34 The sample for the income survey is a sub-sample of private dwellings included in the ABS Monthly Population Survey (MPS). The MPS sample is a multistage selection of private dwellings and a list sample of other dwellings.

35 The sample is suitable for producing reliable estimates at the Australian level for income and housing costs of residents in private dwellings, classified by different population groups based on household composition (such as couples with children), income levels or income sources. Estimates at the state and territory level for broad aggregates are generally reliable although some estimates for Tasmania, the Northern Territory and the Australian Capital Territory should be used with caution (see Appendix 2).

36 In each month in 2002-03 a sample of dwellings was selected for the SIH from the responding households in the MPS. Over the year, about 80% of persons over the age of 15 in this sample responded.

Non-response and imputation

37 Fully non-responding households are those selected for the survey but from which no information is included in the survey results. They include:
  • those affected by death or illness of a household member
  • those in which more than half of the persons over 15 in the household did not respond because they could not be contacted, had language problems or refused to participate.

38 Partial response occurs when:
  • some items of data in a schedule are missing because a person is unable or unwilling to provide the data
  • for a household, not every person over 15 residing in the household responds but at least half of these persons provide data.

39 In the first case of partial response above, the data provided are retained and the missing data are imputed by replacing each missing value with a value reported by another person (referred to as the donor).

40 For the second type of partial response, the data for the persons who did respond are retained, and data for each missing person are provided by imputing data values equivalent to those of a fully responding person (donor). Imputation using donor records is also applied for fully non-responding households that comprise one person or a sole parent whose children are all under the age of 15. Information about the household composition is obtained from the MPS.

41 Donor records are selected by matching information on sex, age and labour force characteristics of the person with missing information. As far as possible, the imputed information is an appropriate proxy for the information that is missing. Depending on which values are to be imputed, donors are chosen from the pool of individual records with complete information for the block of questions where the missing information occurs.

Final sample

42 The final sample on which estimates are based, is composed of persons for which all necessary information is available. The information may have been wholly provided at the interview (fully-responding) or may have been completed through imputation for partially responding or non-responding. The final sample consists of 10,211 households, comprising 19,402 persons 15 years old and over. All income information was imputed for 596 households comprising one adult or one adult with children under 15 years old, and was imputed for one or more persons in 240 partially responding multi-person households.

Capital city Balance of State Total

Persons (a)
Persons (a)
Persons (a)


- nil or rounded to zero (including null cells)
(a) Number of persons aged 15 years and over.


43 Expansion factors, or weights, are values by which information for the sample is multiplied to produce estimates for the whole population. From this survey, estimates are produced referring to persons and to households, and the weights are calculated so that each person in a household has the same weight and that weight is also used for the household.

44 Final weights are calculated through an iterative procedure in which initial weights are adjusted by a calibration process to ensure that survey estimates conform to independently estimated benchmarks. The initial weights are equal to the inverse of the probability of selection in the survey, with initial person weights being equal to initial household weights.

45 Four types of benchmarks are used in the calibration of the final weights:
  • numbers of persons aged 15 and over
  • numbers of children under age 15
  • numbers of households
  • for 1999-2000 and 2000-01 estimates, the value of government benefit cash transfers.

46 Person benchmarks for persons aged 15 and over are estimates of the number of people in each state and territory by age and sex, the number of people in each state and the ACT by labour force status and the number of people in each state living in the capital city or the balance of the state.

47 A separate set of benchmarks is used for children under 15, since there are not individual person records for them in the survey. Information about children is recorded on household records, however, and benchmarks for the number of children aged 0-4 and aged 5-14 are used for each state and territory.

48 Numbers of households are calibrated to benchmarks for total Australia with respect to household composition (based on the number of adults (1, 2 or 3) and whether or not the household contains children).

49 The person and household benchmarks are based on estimates of numbers of persons and households in Australia. The benchmarks are adjusted to include persons and households residing in private dwellings only and therefore do not, and are not intended to, match estimates of the Australian resident population published in other ABS publications.

50 The fourth type of benchmark relates to income from social security transfers, and is only used for 1999-2000 and 2000-01. The benchmark was introduced for those years because, without it, the survey estimates of income from government benefit cash transfers account for a declining proportion of aggregate social security payments reported by the Department of Family and Community Services and the Department of Veterans' Affairs. Extensive investigations could not identify any specific reasons for the decline, indicating that it is likely to be associated with differences between the characteristics of people who respond to the survey and the characteristics of those who do not respond. This type of problem is sometimes called non-response bias, and introducing additional benchmarks is a means of addressing it. The benchmark introduced in this case ensured that the survey estimate of government benefit cash transfers is maintained at a proportion of aggregate benefit cash transfers that is consistent with the proportion achieved between 1994-95, 1997-98 and 2002-03. More detail of the investigations that led to the introduction of this benchmark is provided in Appendix 4 in Household Income and Income Distribution, Australia, 2000-01, cat. no. 6523.0.


51 Estimates produced from the survey are usually in the form of averages (e.g. mean weekly housing costs of couples with dependent children), or counts (e.g. total number of households which own their dwelling or total number of persons living in households that own their own dwelling). For counts of households, the estimate is obtained by summing the weights of all households in the required group (e.g. those owning their own dwelling). For counts of persons, the household weights are multiplied by the number of persons in the household before summing. The SIH collects data on the number of people, including children, in each household but separate records with income and other detailed data are only collected for people 15 years and older. Therefore, counts of persons cannot be obtained by summing the weights of all persons.

Reliability of estimates

52 The estimates provided in this publication are subject to two types of error, non-sampling and sampling error.

Non-sampling error

53 Non-sampling error can occur whether the estimates are derived from a sample or from a complete collection. Major sources of non-sampling error include the following.

54 Non-sample error can arise through the inability to obtain data from all households included in the sample. Although adjustments are made through the weighting process to reflect the differing response rates of various groups in the population, some non-response bias may remain because of differences that exist between the characteristics of respondents and non-respondents.

55 There can also be errors in reporting on the part of both respondents and interviewers. Reporting errors may arise through inappropriate wording of questions, misunderstanding of what data are required, inability or unwillingness to provide accurate information, or mistakes in answers to questions.

56 Errors may also arise during processing of the survey data through mistakes in coding and data recording.

57 Non-sampling errors are difficult to measure in any collection. However, every effort is made to minimise these errors. In particular, the effect of the reporting and processing errors described above is minimised by careful questionnaire design, intensive training and supervision of interviewers, asking respondents to refer to records whenever possible and by extensive editing and quality control checking at all stages of data processing.

58 The error due to incomplete response is minimised by
  • call-backs to all initially non-responding households in order to explain the importance of their cooperation to the survey
  • adjustment to the weights allocated to the respondent households in order to allow for households with similar characteristics from which comprehensive data are not obtained.

Sampling error

59 The estimates are based on a sample of possible observations and are subject to sampling variability. The estimates may therefore differ from the figures that would have been produced if information had been collected for all households. A measure of the sampling error for a given estimate is provided by the standard error, which may be expressed as a percentage of the estimate (relative standard error). Further information on sampling error is given in Appendix 2.


60 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


61 Users may wish to refer to the following ABS products which relate to housing costs:
Australian Housing Survey, Housing Characteristics, Costs and Conditions, 1999, cat.no.4182.0
Government Benefits, Taxes and Household Income, Australia, 1998-99, cat. no 6537.0
Household Expenditure Survey, Australia: User Guide, 1998-99, cat.no.6527.0, available free of charge from the ABS web site
Household Expenditure Survey, Australia: Summary of Results, 1998-99, cat.no.6530.0
Household Expenditure Survey, Australia: Detailed Expenditure Items, 1998-99, cat.no.6535.0
Household Income and Income Distribution, Australia, 2002-03, cat.no.6523.0
Housing Occupancy and Costs, Australia, 1997-98, cat.no.4130.0
Housing Occupancy and Costs, Australia, 2000-01, cat.no.4130.0.55.001
Survey of Income and Housing Costs and Amenities: Income Units, Australia, 1990, cat.no.6523.0
Survey of Income and Housing Costs, Australia: User Guide, 1997, cat.no.6553.0
Measuring Wellbeing: Frameworks for Australian Social Statistics, 2001, cat.no.4160.0
Measuring Australia's Progress, 2004, cat. no.1370.0