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1301.0 - Year Book Australia, 2007  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 24/01/2007   
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Contents >> Housing >> Housing and life cycle stages

HOUSING AND LIFE CYCLE STAGES

As people progress through different life cycle stages and their family structures and financial situations change, so do their housing needs and preferences. For young people leaving their parental home, a typical life experience with housing might begin with renting a small flat or unit for themselves or sharing a group house, then moving on to renting an apartment or house with their partner while saving for a deposit on their first home. Many couples will buy their first home and pay off a considerable part of their mortgage before having their first child. Then, as the number and age of children increase, many will upgrade to a larger house. After the children have left home, most home owners will probably remain in the same home at least until retirement, by which time most will own their home outright. After retirement, some will change location, and in doing so a few will choose a smaller home, possibly a unit in a retirement village. Later, some who are too old or frail to live in their own home will move into cared accommodation (see Residential aged care in the Income and welfare chapter).

While most Australians aspire to own their home outright, at least by the time they retire, many on low incomes cannot afford to buy a home and some cannot afford to rent adequate housing. There are a range of government programs aimed at assisting low income households to buy or rent suitable and affordable housing (see Housing assistance).

In 2003-04, over half of young (reference person aged under 35 years) couple-only households, and young couples with dependent children owned their home (57% and 64% respectively) (graph 8.19 and table 8.21). The home ownership rate was considerably lower for young lone-person households (28%).

Home ownership rates increased with age of reference person (at least up to aged 45-54 years) for all family and household groups. Beyond this age, the home ownership rate for couple-only households continued to increase as the rate for couples with dependents declined, reflecting the transition of couple families with children to 'empty nest' couple-only households. Similarly, at age 65 years and over, home ownership rates for lone-person and couple-only households had converged to some extent, reflecting the transition of couple-only households to lone-person households following the death of one partner.

One-parent families with dependent children had the lowest home ownership rates, ranging from 20% (reference person aged under 35 years) to 55% (reference person aged 45-54 years) and, conversely, the highest proportions of renters, particularly public renters. In 2003-04, 17% of all one-parent families with dependent children were renting from a state/territory housing authority and 38% were renting privately. Lone-person households also had relatively high proportions of renters, with 9% renting from a state/territory housing authority and 26% renting privately.

8.19 HOME OWNERSHIP RATES, By household composition - 2003-04



People living alone are more likely to live in high density housing than any other group, particularly when young. In 2003-04, the proportion of lone persons living in a flat, unit or apartment ranged from 41% of those aged under 35 years to 15% of those aged 65 years and over. Even so, lone persons were more likely to have one or more spare bedrooms than families with children. In 2003-04, 85% of lone-person households and 97% of couple-only households had one or more spare bedrooms (graph 8.20).

8.20 HOUSEHOLDS WITH ONE OR MORE SPARE BEDROOMS(a) - 2003-04


8.21 SELECTED HOUSEHOLD AND DWELLING CHARACTERISTICS(a) - 2003-04

Household composition
Proportion of households with characteristic
Estimated
number of
households
Average
number of
persons in
household
Average
number of
bedrooms
in dwelling
One or
more
spare
bedrooms(b)
Living in
separate
house
Living in
flat/unit/
apartment
Home
owner
Renter
'000
no.
no.
%
%
%
%
%

REFERENCE PERSON AGED UNDER 35 YEARS

Lone person
336.1
1.0
2.2
76.6
41.2
41.0
28.4
66.6
Couple only
411.7
2.0
2.6
91.9
68.6
19.1
57.2
38.6
Couple family with dependent children
476.4
3.9
3.2
63.9
88.5
5.6
63.5
33.7
One-parent family with dependent children
170.5
2.9
3.0
48.8
75.8
10.0
19.7
77.8
All households(c)
1,737.6
2.6
2.8
67.3
68.3
20.0
44.3
52.2

REFERENCE PERSON AGED 35-44 YEARS

Lone person
294.1
1.0
2.4
83.5
53.4
29.8
47.6
49.2
Couple only
149.6
2.0
2.8
95.0
71.9
17.7
67.2
30.9
Couple family with dependent children
831.1
4.2
3.5
65.6
92.2
3.8
81.5
16.5
One-parent family with dependent children
227.0
3.0
3.0
44.2
83.7
7.7
44.4
52.8
All households(c)
1,710.7
3.2
3.2
67.8
81.8
10.1
67.8
30.0

REFERENCE PERSON AGED 45-54 YEARS

Lone person
313.7
1.0
2.5
86.6
63.5
21
60.9
37.6
Couple only
289.1
2.0
3.2
97.9
90.2
5.1
85.2
14.5
Couple family with dependent children
419.1
4.0
3.6
63.8
95.8
*1.9
87.4
10.5
One-parent family with dependent children
110.0
2.8
3.1
49.0
85.8
*8.8
55.3
40.3
All households(c)
1,592.0
2.9
3.3
74.1
86.9
7.0
78.8
19.7

REFERENCE PERSON AGED 55-64 YEARS

Lone person
301.2
1.0
2.5
85.1
65.1
21.1
67.4
29.5
Couple only
509.7
2.0
3.3
99.0
92.9
2.6
90.3
7.7
Couple family with dependent children
67.7
3.7
3.6
66.8
94.8
*1.6
80.2
18.7
All households(c)
1,152.9
2.1
3.1
87.8
85.7
7.5
82.5
15.5

REFERENCE PERSON AGED 65 YEARS AND OVER

Lone person
717.0
1.0
2.5
88.6
69.1
15.4
76.4
19.7
Couple only
656.7
2.0
3.0
97.8
87.9
5.1
89.2
9.4
All households(c)
1,542.6
1.6
2.8
91.7
79.8
9.5
83.1
14.4

ALL AGE GROUPS

Lone person
1,962.1
1.0
2.4
84.9
60.5
23.7
60.0
36.6
Couple only
2,016.9
2.0
3.0
96.7
84.4
8.3
80.7
17.3
Couple family with dependent children
1,798.4
4.0
3.4
64.8
92.4
3.6
78.0
19.7
One-parent family with dependent children
526.6
2.9
3.0
47.6
81.6
8.8
39.4
57.6
All households(c)
7,735.8
2.5
3.0
76.7
80.0
11.2
70.0
27.6

(a) By age group of household reference person.
(b) As measured against the Canadian National Occupancy Standard.
(c) Includes all other family and household types.
Source: ABS data available on request, Survey of Income and Housing, 2003-04.


There are long-term benefits in home ownership. Initially, the cost of home purchase is often far greater than renting (due to the costs of deposits and fees, as well as ongoing mortgage repayments). However, the much lower costs associated with owning a home outright, and the investment that a home represents, can be major contributors to economic wellbeing, particularly for older people, as many retire on considerably reduced incomes.

In 2003-04, the average weekly housing costs of young households with a mortgage was $348 - 75% more than the average weekly rent of young private renters (graph 8.22). The difference in housing costs between owners with a mortgage and private renters was progressively smaller in older age groups, mainly because of progressively lower mortgage payments. For households with a reference person aged 65 years and over, private rents were higher, on average, than the housing costs of home owners with a mortgage.

8.22 AVERAGE WEEKLY HOUSING COSTS, By tenure - 2003-04



The difference in housing costs between younger and older owners with a mortgage is largely a reflection of the difference in house prices, and hence the amount borrowed, at the time of purchase. On average, recent home buyers paid higher prices than those who bought their homes ten, twenty and thirty years ago. In 2003-04, more than half (58%) of young households with a mortgage were recent home buyers compared with 15% of the oldest home owners (reference person aged 65 years and over) with a mortgage (table 8.23). The average mortgage outstanding for young home owners was $154,000 compared to $42,000 for the oldest.

For other tenure types, there was much less variation in housing costs across age groups. In 2003-04, average weekly rents rose from $199 for young households renting privately to $213 for those with a reference person aged 35-44 years, and were progressively lower for older private renters. This pattern largely reflects the need for larger households to rent larger, and often more expensive, dwellings. In 2003-04, couple families with dependent children represented 17% of young private renter households; 28% of those with a reference person aged 35-44 years; and 16% of those with a reference person aged 45-54 years.

Average weekly rents of public renters were less than half those of private renters, starting at $91 for younger households and declining to $69 for the oldest. Owners without a mortgage had by far the lowest and least variable housing costs, averaging $25 per week overall.


8.23 HOUSING COSTS, MORTGAGE, AND TENURE AND LANDLORD TYPE(a) - 2003-04

Household composition
Proportion of households with characteristic
Average
weekly
housing
costs
Average
housing
costs as a
proportion
of gross
household
income
Average
amount of
mortgage
outstanding(b)
Proportion
of owners
with a
mortgage
who are

recent home
buyers(c)
Owner
without a
mortgage
Owner
with a
mortgage
Renter -
state/
territory
housing
authority
Renter -
private
landlord
$
%
$'000
%
%
%
%
%

REFERENCE PERSON AGED UNDER 35 YEARS

Lone person
174
24
128
64.0
*3.0
25.4
3.4
61.4
Couple only
306
19
183
70.7
2.9
54.2
0.3
36.0
Couple family with dependent children
267
21
149
49.0
4.6
58.6
1.8
29.9
One-parent family with dependent children
156
24
113
49.3
*2.1
17.5
20.3
53.3
All households(d)
238
20
154
57.7
4.5
39.8
3.5
46.4

REFERENCE PERSON AGED 35-44 YEARS

Lone person
162
21
106
39.7
12.1
35.5
9.7
37.5
Couple only
256
16
157
36.8
12.4
54.8
**0.7
29.6
Couple family with dependent children
260
16
138
28.4
12.6
68.3
1.3
14.0
One-parent family with dependent children
158
21
91
31.2
10.0
34.4
16.6
34.9
All households(d)
221
17
130
30.9
13.4
54.4
4.9
23.5

REFERENCE PERSON AGED 45-54 YEARS

Lone person
134
19
88
25.8
25.0
35.9
10.5
26.0
Couple only
144
11
97
26.3
38.7
46.5
*2.9
11.1
Couple family with dependent children
208
11
116
20.4
31.8
55.8
*1.2
8.4
One-parent family with dependent children
137
14
90
20.0
20.9
34.4
14.1
24.1
All households(d)
167
12
103
21.3
31.4
47.4
4.6
14.0

REFERENCE PERSON AGED 55-64 YEARS

Lone person
82
17
76
24.1
48.8
18.7
11.4
15.4
Couple only
70
7
71
18.2
69.0
21.3
1.7
5.3
Couple family with dependent children
142
7
151
25.7
49.6
32.1
*3.4
13.1
All households(d)
87
8
87
20.8
58.6
23.9
4.9
9.3

REFERENCE PERSON AGED 65 YEARS AND OVER

Lone person
36
9
*31
18.4
73.8
2.6
9.8
8.1
Couple only
34
5
*42
13.2
85.2
4.0
4.0
4.7
All households(d)
37
7
42
14.8
79.2
3.9
6.6
6.5

ALL AGE GROUPS

Lone person
101
18
97
37.7
40.8
19.2
9.0
25.6
Couple only
131
12
132
42.9
52.3
28.5
2.2
14.0
Couple family with dependent children
245
15
137
31.8
17.8
60.8
1.5
16.2
One-parent family with dependent children
151
20
95
31.4
10.8
28.6
17.4
37.8
All households(d)
157
14
122
33.7
34.9
35.1
4.9
21.2

(a) By age group of household reference person.
(b) Only includes owners with a mortgage.
(c) Owners who built or purchased their dwelling in the three years prior to the survey.
(d) Includes all other family and household types.
Source: ABS data available on request, Survey of Income and Housing, 2003-04.


Much of the variation in housing costs between households at different life-cycle stages is related to differences in tenure patterns. For example, in 2003-04, young households had the highest average weekly housing costs ($238). They also had the highest proportion of recent home buyers (58% of all home owners with a mortgage), the highest average amount of mortgage outstanding ($154,000) and the highest proportion of private renters (46%).

Housing costs were on average lower for households with a reference person aged 35-44 years (averaging $221 per week). Even though this group had the highest proportion of home owners with a mortgage (54% compared to 40% of younger households) only 31% of these were recent home buyers and the average amount of mortgage outstanding was considerably lower ($130,000). This group also had a higher proportion of owners without a mortgage (13% compared with 5% of younger households) and a lower proportion of private renters (24% compared with 46% of younger households).

At other end of the spectrum, the oldest households (with a reference person aged 65 years and over) had the highest proportion of home owners without a mortgage (79%), the lowest proportion of private renters, the highest proportion of public renters, and, for those in this group that had a mortgage, it was lowest of all age groups ($42,000). Together these factors resulted in this group having by far the lowest average housing costs ($37 per week).

Housing costs decline with age for all family and household types, as does the proportion of household income spent on housing, but to a lesser extent. For example, in 2003-04, the oldest lone-person households paid an average of $36 (9% of their gross household income) for housing, while the youngest lone-person households paid $174 (24% of their gross household income) for housing.

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