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1301.0 - Year Book Australia, 2008  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 07/02/2008   
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Contents >> Housing >> Housing costs

HOUSING COSTS

For most Australians, whether buying or renting their home, the provision of adequate housing for themselves and their families involves substantial ongoing expenditure throughout much of their lives. Housing costs are often the largest regular expenses to be met from a household's current income.

The housing costs measure compiled from the Survey of Income and Housing is defined as the sum of:

  • rent payments,
  • rates payments (general and water), and
  • mortgage or unsecured loan payments, if the initial purpose was primarily to buy, add or alter the dwelling.

In 2005-06, owners without a mortgage had the lowest housing costs, averaging $29 per week or 3% of gross household income. In contrast, owners with a mortgage had the highest housing costs, averaging $338 per week or 20% of their gross household income.

Among renters, housing costs averaged $100 per week for households renting from a state/territory housing authority and more than double that ($223) for households renting from a private landlord. The effect of Commonwealth Rent Assistance (CRA) should be taken into consideration when comparing the housing costs of private renters with those of other households.

Eligible social security recipients may receive a non-taxable income supplement in the form of CRA if the private rent they pay is above a threshold level. It is estimated that CRA lowers the total housing costs by 10% for all private renters. For the one-third of private renters who receive CRA, their housing costs are estimated to be lowered by about 30%. For more information see Housing assistance and Housing Occupancy and Costs, Australia (4130.0.55.001).

For the majority of owner and renter households, housing costs represented less than 25% of gross household income, but for some it was more than 50%. In 2005-06, 9% of private renters and 8% of owners with a mortgage spent more than half of their gross income on housing (table 10.9).
10.9 ALL HOUSEHOLDS, Housing costs by tenure and landlord type - 2005-06

Proportion of households whose housing costs represented(a)
Average weekly housing costs
Average housing costs as a proportion of gross household income(a)
25% or less of gross household income
More than 50% of gross household income
Number of households
$
%
%
%
'000

Owner without a mortgage
29
3
98.0
0.9
2 718.1
Owner with a mortgage
338
20
63.5
7.5
2 772.0
Renter - state/territory housing authority
100
17
77.4
*2.5
368.8
Renter - private landlord
223
19
61.1
8.7
1 745.3
Total renters(b)
199
19
64.0
7.7
2 261.0
All households(c)
185
14
76.2
5.1
7 926.2

* estimate has a relative standard error of 25% to 50% and should be used with caution
(a) Excludes households with nil or negative total income.
(b) Includes other landlord type.
(c) Includes other tenure type.
Source: Housing Occupancy and Costs, Australia (4130.0.55.001).


Between 1995-96 and 2005-06 owners with a mortgage experienced a $78 increase in average weekly housing costs, after adjustment for inflation (graph 10.10). As a proportion of gross household income, housing costs of owners with a mortgage declined from the 1995-96 average of 19%, to a low of 17% between 1999-2000 and 2002-03. The proportion rose to 19% in 2003-04 and 20% in 2005-06.

For other tenure types, changes were smaller with an overall increase of $33 for private renters and $21 for public renters between 1995-96 and 2005-06. For private renters, this represented a small decline in the proportion of income spent on housing costs, from 20% to 19% - but for public renters it represented the same proportion of income spent on housing costs as in 1995-96, at 17% (graph 10.11). As noted above, the effect of CRA receipts should be taken into consideration when making comparisons of housing costs of private renters with those of other tenure types.
10.10 Average real weekly housing costs(a), by tenure and landlord type
Graph: 10.10 Average real weekly housing costs(a), ^by tenure and landlord type

10.11 Housing costs as a proportion of gross income, by tenure and landlord type(a)
Graph: 10.11 Housing costs as a proportion of gross income, ^by tenure and landlord type(a)

In 2005-06, households in Sydney and Canberra had the highest average weekly housing costs - $249 and $221 respectively (graph 10.12). In each of these cities, housing costs averaged more than $340 per week for owners with a mortgage; more than $275 per week for private renters; and more than $100 per week for public renters. At $142 per week, average housing costs in Hobart were just 57% of the Sydney average, and the lowest of all the capital cities.

In all states, average housing costs were higher in the capital city than in the rest of the state. The greatest difference was in New South Wales, with Sydney housing costs 64% higher than in the rest of the state. In contrast, Brisbane housing costs were only 2% higher than in the rest of Queensland, which had the highest non-capital city housing costs in Australia.
10.12 Average weekly housing costs, by state and territory - 2005-06
Graph: 10.12 Average weekly housing costs, ^by state and territory—2005–06

Differences in average housing costs between regions reflect differences in property values (see Home buyers), rental prices and tenure patterns (see Home owners and renters). For example, New South Wales, Queensland and Western Australia shared the highest non-capital city median dwelling value ($300,000), but New South Wales had the highest average amount of mortgage outstanding ($149,000) and, therefore, had the highest average housing costs for owners with a mortgage ($333). Queensland had the highest non-capital city private rents, averaging $225 per week, and the highest proportion of non-capital city households renting from a private landlord (25%).

Similarly, in 2005-06, the median value of dwellings in Sydney ($500,000) was more than 1.9 times that of Hobart ($262,000) as was the mean amount of mortgage outstanding ($216,000 compared with $111,000). Consequently, average weekly housing costs for home owners were higher in Sydney than in Hobart, particularly for owners with a mortgage ($443 compared with $258) (table 10.13). Also, private rents in Sydney were 74% higher than in Hobart. The proportion of Sydney households renting privately was also higher (25% compared with 17%) further contributing to the overall difference in average housing costs between Sydney and Hobart.

Household income also varies between regions, and when housing costs are expressed as a proportion of income, regional differences are moderated to some extent. For example, housing costs for all capital cities combined were 32% higher than in the rest of Australia ($203 compared with $154) but the proportion of income spent on housing costs was no higher (both 14%).
10.13 CAPITAL CITY HOUSEHOLDS, Housing costs by tenure and landlord type - 2005-06

Sydney
Melbourne
Brisbane
Adelaide
Perth
Hobart
Darwin
Canberra
(a)
Eight capital cities
Balance of Australia

AVERAGE WEEKLY HOUSING COSTS ($)

Owner without a mortgage
29
35
29
31
24
27
26
31
30
27
Owner with a mortgage
443
320
338
272
335
258
272
343
357
300
Renter - state/territory housing authority
104
119
103
88
76
83
94
104
101
99
Renter - private landlord
294
217
221
194
183
169
259
280
239
190
Total renters(b)
257
203
197
162
165
156
199
228
212
173
Total households(c)
250
182
188
154
191
143
196
221
203
154

HOUSING COSTS AS A PROPORTION OF GROSS HOUSEHOLD INCOME (%)(d)

Owner without a mortgage
2
3
2
3
2
3
2
2
2
3
Owner with a mortgage
21
19
19
18
19
17
13
17
20
20
Renter - state/territory housing authority
19
19
13
18
14
20
12
20
17
18
Renter - private landlord
21
19
19
18
17
17
17
17
19
18
Total renters(b)
21
19
18
18
17
18
15
17
19
18
Total households(c)
16
13
14
13
14
13
12
13
14
14

(a) All ACT owner and renter households.
(b) Includes other landlord type.
(c) Includes other tenure type.
(d) Excludes households with nil or negative total income.
Source: Housing Occupancy and Costs, Australia (4130.0.55.001).





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