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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).
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.
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.
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%).