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4102.0 - Australian Social Trends, 1995  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 20/06/1995   
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Contents >> Housing >> Housing Costs: Low income private renters

Housing Costs: Low income private renters

In 1990, low income private renter families spent 36% of their incomes on rent. By 1994, this had increased to 42%.

Many Australians look forward to owning their own homes. They begin to realise their ambition by saving a deposit and then taking out a mortgage to purchase their home. Home purchase is most common among couple families (see Australian Social Trends 1994, Housing the population). Between 1990 and 1994, a period of falling housing interest rates, there was an increase in the proportion of couples who owned or were purchasing their homes (79% to 81%) and a compensating decrease in the number of couples living in rented accommodation.

While saving for a deposit, people often rent accommodation. However, a family's ability to save largely depends on the amount of rent they pay. In turn, rent is related to the availability of private rented accommodation and public housing. Some people in rented accommodation, especially those on low incomes, are never able to save a deposit. Many on low incomes remain renters for most, if not all, of their lives.

In 1994, 1.3 million households rented their accommodation. Most (68%) were renting privately. 211,400 households were low income private renters, i.e receiving incomes which put them in the bottom 40% of the income distribution. They represented 48% of all low income renting households.

LOW INCOME HOUSEHOLDS WHO RENTED

1990
1994


Public renters
Private renters
All renters(a)
Public renters
Private renters
All renters(a)
Family/household type
'000
'000
'000
'000
'000
'000

Couple with dependants
9.1
17.1
28.4
7.7
21.7
30.2
Couple without dependants
24.4
29.3
56.9
20.0
23.1
44.8
One parent with dependants
53.1
29.9
86.0
47.7
51.1
102.8
One person household
105.6
99.8
226.7
129.3
115.5
265.9
All families
192.3
176.1
398.0
204.7
211.4
443.8

(a) Includes families who rented from their employers or had other rental arrangements.

Source: Survey of Income & Housing Costs and Amenities (1990); Rental Tenants Survey (1994)


Family and household types

This review considers only single family households and one person households in rented private dwellings. The family may consist of a couple with dependants, a couple without dependants or a lone parent with dependants. Non-dependant family members may be present in the household but their incomes have been excluded from the total household income. Group households have also been excluded.

Low income households are those whose total weekly income is in the bottom 40% of the income distribution of all income units who were renting.


Changes in the 1990s
Between 1990 and 1994 the number of low income households who were renting increased from 398,000 to 443,800 and the number who were renting privately increased from 176,100 to 211,400. However, there was a change in the composition of low income private renter households. There were decreases in the proportions of couples and people living alone and an increase in the proportion of one parent families.

In 1990, more low income one parent families were in public rental accommodation than were in private (53,100 compared to 29,900). By 1994 this situation had reversed. This was due both to an increase in the number of one parent families and to a shortage of public rental accommodation (see Housing - National summary tables).

MEDIAN WEEKLY RENT PAID BY LOW INCOME HOUSEHOLDS

1990
1994
Rent increase


Households
Rent
Households
Rent
1990-94
Type of landlord
'000
$
'000
$
%

State or territory housing authority
192.3
35
204.7
39
11
Private
176.1
92
211.4
103
12
    Real estate agent
82.6
110
116.3
111
1
    Person not in the same dwelling
93.5
77
95.1
97
26
Total(a)
398.0
49
443.8
64
31

(a) Includes families who rented from their employers or had other rental arrangements.

Source: Survey of Income & Housing Costs and Amenities (1990); Rental Tenants Survey (1994)


Household incomes and rent
Between 1990 and 1994 median rents paid by low income households increased by 31%. Those in private housing paid more rent than those in public housing but were subject to a similar increase in their median weekly rental payments.

Most of the increase in private rents paid by low income households between 1990 and 1994 was due to rises in rent charged by people, other than real estate agents, not living in the same dwelling as the renting household. Rents charged by real estate agents increased by 1% between 1990 and 1994, and the number of low income households renting from real estate agents increased by 33,700.

Between 1990 and 1994 the proportion of income that low income private renting households spent on rent increased from 36% to 42%. In particular, there was a marked rise in the proportion of income that low income one parent families spent on rent. In 1990, one parent low income private renter families spent 29% of their incomes on rent compared to 46% of their incomes in 1994.

In 1994 low income private renter households spent 61% of their incomes on rent while those renting public housing spent 25%. Of all family types, low income couples with dependants spent the highest proportion of their incomes on rent whether they were public or private renters.

PROPORTION OF WEEKLY INCOME PAID FOR RENT BY LOW INCOME HOUSEHOLDS



Source: Survey of Income & Housing Costs and Amenities (1990); Rental Tenants Survey (1994)




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