|Page tools: Print Page Print All|
IMPUTED RENT ESTIMATES
The availability of imputed rent estimates allows the analysis of household income to be extended to include the imputed rental incomes that flow to people living in homes owned by the occupant and those paying subsidised rent. Such imputations allow for more meaningful comparison of the income circumstances of people living in different tenure types, and to understand changes over time in income levels and the distribution of income when tenures may be changing over time.
Including imputed rent as part of household income and expenditure conceptually treats owner-occupiers as if they were renting their home from themselves, thus simultaneously incurring rental expenditure and earning rental income. Imputed rent is included in income on a net basis (i.e. the imputed value of the services received less the value of the housing costs incurred by the household in their role as a landlord).
Net imputed rent is estimated as gross imputed rent less reported housing costs. For owner occupiers, the housing costs subtracted are those which would normally be paid by landlords (i.e. rates, mortgage interest, insurance, repairs and maintenance). For households paying subsidised rent (e.g. tenants of an employer or of a state/territory housing authority) and households occupying their dwelling rent-free, the housing costs that are subtracted are largely made up of the reported rent paid, but other housing costs incurred, such as rates, are also subtracted for some tenure types. In the case of tenants of state/territory housing authorities, the net imputed rent estimates have been benchmarked to administrative data on the mean weekly rental subsidy.
Hedonic regression is used to estimate the market value of the rental equivalent of an owner-occupied dwelling. Data from the SIH on reported rents paid by private market renters is regressed on the characteristics of their rented dwellings (e.g. location and dwelling structure). The estimated coefficients are then applied to the corresponding characteristics of owner-occupied and other dwellings to produce imputed values of the gross rental equivalence for these dwellings.
For more information on imputed rent, including its impact on the income distribution, please refer to the 'Imputed rent' chapter of the Survey of Income and Housing, User Guide, Australia, 2011-12 (cat. no. 6553.0).
These documents will be presented in a new window.