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HOUSING FOR OLDER AUSTRALIANS
Households tenure by age of reference person - 2002-03
2. Housing tenure patterns
Tenure refers to the nature of a household's legal right to occupy the premises in which household members live. A household's tenure tends to be related to the current life-cycle stage of household members. Generally, this cycle follows a pattern of renting in early adulthood, moving to home purchase and mortgages as relationships are formed and families raised, through to outright home-ownership (without a mortgage) in older age.
Home ownership is an aspiration for many Australians, an aspiration that has been referred to as 'the great Australian dream'. This is reflected nationally in high levels of home ownership. As expected, older person households have higher levels of home ownership than other households.
In 2002-03, there were approximately 1.5 million older person households. Of these, approximately 80% lived in a dwelling that they owned outright, compared with 25% of younger households. These proportions have remained largely stable since 1995-96 when 80% of older households owned outright compared with 33% of younger households.
The proportion of owner households with a mortgage is highest for households with a reference person aged 35-44 years and declines steadily with age. Only 3% of older person households were purchaser households paying off a mortgage.
After owning their home outright, the next most common tenure for older person households was renting. In 2002-03, approximately 13% of older person households were living in rental accommodation compared with 32% of younger households. Almost half (45%) of the 204,000 older person households that were renting, rented their home from a state or territory housing authority.
A further 44% rented from a private landlord, and most of the remaining 11% rented from community and church groups, housing cooperatives or caravan parks. Older person households that were renting, except for those renting from a state or territory housing authority, were very likely to be receiving Commonwealth Rent Assistance (CRA) to subsidise their housing costs. At 30 June 2003 there were about 160,000 income units (mostly single person income units) receiving both the age pension and rent assistance.
Households by tenure and age of reference person - 2002-03
3. Household characteristics
In 2002-03, the proportion of lone person and couple only households was much higher among older person households than among younger households. Some 44% of older person households were lone person households compared with 20% of younger households. Similarly, 40% of older person households were couple only households, compared with 22% of the younger group.
Almost three quarters (72%) of older lone person households comprised women living alone. The higher proportion of women than men living in older lone person households in part reflects that women live longer than men. According to the 2001 Census, for people aged 65 and over, 45% of women were widowed compared with 14% of men.
Compared with younger households, a much smaller proportion of older person households were lone parents or couples with dependent children (1% of older person and 37% of younger households). Many of the older couple only households would be 'empty nest' households, that is, couples with older children who have left home.
Composition of households - 2002-03
4. Housing characteristics
Like most Australian households, older person households tend to live in dwellings with more bedrooms than they might need according to the number of people who live in the household (see Australian Social Trends 1998, Smaller households, larger dwellings). In 2002-03, older couple only households had an average of 3.0 bedrooms in their dwelling and older lone person households had an average of 2.4 bedrooms. Many older person households still occupy houses selected decades earlier when they needed to accommodate larger numbers of family members at home and the household was at a different life-cycle stage.
5. Housing costs
For owner households, by the traditional retirement age of 65 years, both household incomes and housing costs are likely to have been greatly reduced. In 2002-03, 89% of older couple only households were owners without a mortgage, with average weekly housing costs of $21. Older couple only households that still had a mortgage spent on average $98 a week on housing. These costs were considerably lower than the average $270 per week paid by younger couple only households with a mortgage. This reflects in part the fact that most older couple only households would, on average, have purchased their home some years earlier when house prices and mortgages were lower, and would have repaid much of their mortgage by the age of 65.
Of older lone person households, 72% owned their house outright and had average housing costs of $18 a week. Those still paying a mortgage had average housing costs of $52 a week.
Analysis of housing costs for older Australians who are not home owners is complicated by a number of factors, including: the 7% of older Australians who live in non-private dwellings; the 7% of older Australians who live in private dwellings where the reference person is not an older Australian; and the provision of accommodation support (through both supply of public housing and rent assistance). In June 2003, there were 158,000 income units (representing about 180,000 people) receiving both the age pension and rent assistance (CRA), and their average CRA payment was $69 per fortnight. Other older Australians receiving other government income support benefits may also have received CRA. The primary data source for the analysis in this article (the Survey of Income and Housing) cannot distinguish the receipt of CRA from other government cash benefits.
The 13,000 older couple only households that were renting from state or territory housing authorities paid an average of $83 per week on housing costs in 2002–03, or 23% of their households' gross weekly income. The 19,000 older couple only households that were renting from private landlords were spending an average of $185 per week on housing costs before deducting CRA from those costs. While the average rents paid by these private renters were higher than for those renting from housing authorities, their incomes were also higher on average, and so their income after housing costs and tax had been deducted was likely to be higher, on average, than public renters.
The 69,000 older lone person households renting publicly paid, on average, $53 per week in housing costs, or 23% of their households' gross weekly income. This is the same proportion as spent by older couple only households renting publicly. The 54,000 older lone person households in the private rental market paid, on average, $125 per week in housing costs before deducting CRA from those costs. As with couple only households, the incomes of older lone person households renting from private landlords were higher than those renting from housing authorities. However, their income after housing costs and tax was deducted was likely to be a little lower, on average, than for those renting publicly.
HOUSING COSTS BY TENURE AND LANDLORD TYPE - 2002-03
6. Home ownership and wealth
Experimental estimates of average household wealth show that wealth increases with age. Wealth also appears to be depleted to some degree after the traditional retirement age.
Average household wealth rose between 1994 and 2000 for all age groups, but the rise was most marked for older person households. The estimated average wealth for older person households increased from $267,000 in 1994 to $390,000 in 2000. The greater increase in the wealth of older person households is partly due to substantial rises in the value of real estate. In 2002-03, the average value of dwellings owned by lone person older households was similar to the average value of dwellings owned by older couple only households ($280,000 and $285,000 respectively).
Average household wealth - 1994-2000
7. Dwelling values by state and territory
The average value of dwellings owned by older person households differs across states and territories. In 2002-03, New South Wales had the highest average value ($395,000), followed by the Australian Capital Territory ($312,000) and Victoria ($280,000), while Tasmania had the lowest average of $141,000.
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