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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 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 measures of housing costs compiled from the Survey of Income and Housing cover different items for different types of tenure:

  • owner without a mortgage - rates payments (general and water)
  • owner with a mortgage - rates payments plus mortgage or unsecured loan payments if the initial purpose of the mortgage/unsecured loan was primarily to buy, build, add to or alter the dwelling
  • renter - rent payments (not adjusted for rental assistance refunds).

In 2003-04, owners without a mortgage had the lowest housing costs, averaging $25 per week or 3% of gross household income. In contrast, owners with a mortgage had the highest housing costs, averaging $287 per week or 19% of their gross household income. Among renters, housing costs averaged $84 per week for households renting from a state/territory housing authority and more than double that ($198) for households renting from a private landlord. In both cases, housing costs represented an average of 19% of their gross household income. The effect of Commonwealth Rent Assistance (CRA) should be taken into consideration when comparing the housing costs of private renters to 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 in this chapter 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 household income, but for some it was more than 50%. In 2003-04, 9% of private renters and 7% of owners with a mortgage spent more than half of their income on housing (table 8.8).


8.8 OWNER AND RENTER HOUSEHOLDS, Housing costs by tenure and landlord type - 2003-04

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

Owner without a mortgage
25
3
98.0
1.4
2,702.9
Owner with a mortgage
287
19
67.3
7.0
2,713.8
Renter - state/territory housing authority
84
19
76.1
*2.4
376.4
Renter - private landlord
198
19
60.7
9.4
1,638.4
Total renters(b)
174
19
64.3
7.8
2,133.4
All owner and renter households
157
14
77.9
5.1
5,416.7

(a) Includes households with nil or negative total income.
(b) Includes other landlord types.
Source: Housing Occupancy and Costs, Australia, 2003-04 (4130.0.55.001).


Between 1994-95 and 2003-04, owners with a mortgage experienced a $45 increase in weekly housing costs after adjustment for inflation, most of which occurred in the last year (graph 8.9). As a proportion of gross household income, housing costs of owners with a mortgage rose from an average of 17% in 2002-03 to 19% in 2003-04, the same as in 1994-95.

For other tenure types, changes were smaller with an overall increase of $21 for private renters and $6 for public renters between 1994-95 and 2003-04. For private renters, this represented a small decline in the proportion of income spent on rent, from 20% to 19% - but for public renters it represented an increase, from 17% to 19% of income spent on rent (graph 8.10). 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.

8.9 WEEKLY HOUSING COSTS(a), By tenure and landlord type 8.9 WEEKLY HOUSING COSTS(a), By tenure and landlord type

8.10 HOUSING COSTS AS A PROPORTION OF INCOME, By tenure and landlord type 8.10 HOUSING COSTS AS A PROPORTION OF INCOME, By tenure and landlord type


In 2003-04, households in Sydney, Darwin and Canberra had the highest average weekly housing costs - $218, $202 and $189 respectively (graph 8.11). In each of these cities, housing costs averaged more than $300 per week for owners with a mortgage; more than $200 per week for private renters; and more than $90 per week for public renters. At $118 per week, average housing costs in Hobart were a little over half 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 73% higher than in the rest of the state. In contrast, Brisbane housing costs were only 10% higher than in the rest of Queensland which had the highest non-capital city housing costs in Australia.

8.11 AVERAGE WEEKLY HOUSING COSTS, By state and territory - 2003-04 8.11 AVERAGE WEEKLY HOUSING COSTS, By state and territory - 2003-04


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, Queensland had the second highest non-capital city median dwelling value ($205,000) but the highest average amount of mortgage outstanding ($106,000) and, therefore, the highest average housing costs for owners with a mortgage ($257 per week). Queensland also had the highest non-capital city private rents, averaging $177 per week, and the highest proportion of non-capital city households renting from a private landlord (26%).

Similarly, in 2003-04, the median value of dwellings in Sydney ($500,000) was more than double that of Hobart ($200,000) as was the average amount of mortgage outstanding ($178,000 compared with $82,000). Consequently, average weekly housing costs for home owners were higher in Sydney than in Hobart, particularly for owners with a mortgage ($398 compared with $205) (table 8.12). Also, private rents in Sydney were 77% higher than in Hobart. The proportion of Sydney households renting privately was also higher (24% compared with 14%) 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 42% higher than in the rest of Australia ($176 compared with $124) but the proportion of income spent on housing costs was only 8% higher (14% compared with 13%).


8.12 CAPITAL CITY OWNER AND RENTER HOUSEHOLDS, Housing costs by tenure and landlord type - 2003-04

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

AVERAGE WEEKLY HOUSING COSTS ($)

Owner without a mortgage
27
25
27
26
21
22
28
27
26
23
Owner with a mortgage
398
299
272
230
253
205
314
330
312
237
Renter - state/territory housing authority
92
90
76
81
81
78
95
92
86
81
Renter - private landlord
267
203
198
165
170
151
211
257
218
160
Total renters(b)
233
187
173
135
155
123
172
204
192
142
Total owner and renter households
218
165
158
132
149
118
202
189
176
124

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

Owner without a mortgage
2
3
3
3
2
3
2
2
3
3
Owner with a mortgage
22
19
19
17
17
14
18
18
20
18
Renter - state/territory housing authority
22
23
15
18
19
15
16
24
19
19
Renter - private landlord
21
19
20
16
17
18
18
19
20
18
Total renters(b)
20
20
20
17
17
17
17
19
19
17
Total owner and renter households
16
14
15
12
13
11
14
14
14
13

(a) All ACT owner and renter households.
(b) Includes other landlord types.
Source: Housing Occupancy and Costs, Australia, 2003-04 (4130.0.55.001).

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