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SUMMARY OF FINDINGS
The proportion of Australian households that own their own home with or without a mortgage has declined from 71% in 1994-95 to 67% in 2011-12. Over this period there was a decrease in the proportion of households that owned their dwelling outright, from 42% in 1994-95 to 31% in 2011-12. There were increases in the proportion of households that owned their dwelling with a mortgage (from 30% to 37%) and in the proportion of households that were renting privately (from 18% to 25%) (table 3). The decline in outright home ownership may, in part, reflect increasing uptake of flexible low-cost financing options which allow households to extend their existing home mortgages for purposes other than the original home purchase.
Life cycle stages
A typical life cycle includes childhood, early adulthood and the forming and maturing of families. As people progress through different life cycle stages and their family structures and financial situations change, so do their housing needs and preferences. The life cycle stages used in this publication provide a simplified view of life cycle possibilities, as illustrated in tables 15 and 16. Some household types, such as lone persons aged 35-64 years, are not included in this sequential analysis.
The tenure of a household is strongly related to life cycle stages, generally following a pattern of renting in early adulthood, moving to home purchase and mortgages as partnerships are formed and children are born, and owning a home outright in older age. Only 2% of lone person and 1% of couple only households with the reference person aged under 35 years owned their home outright, compared to 72% of lone persons aged 65 and over and 82% of couples with the reference person aged 65 years and over (table 16).
Younger persons in a couple relationship were more likely to move into home ownership than younger single people, with 45% of younger couple households owning their home with or without a mortgage. When couples have children they are more likely than younger couple only households to own a home. For couples with dependent children only and their eldest child under 5 years, 64% owned their home with or without a mortgage. This rose to 72% for couples with their eldest child aged 5 to 14, and to 84% for couples with their eldest child aged 15 to 24 (table 16).
Lone person and couple only households with the reference person aged under 35 years were more likely to be renting from private landlords (55% and 52% respectively) than to own their own home. People in these households are generally more mobile. Many are studying or starting their careers, and are likely to be on lower incomes and have lower reserves of wealth than at later stages in their lives (table 16).
One parent households with dependent children were more likely to be renting (63%) than to own their home (37%), and they were the life cycle group most likely to be renting through a state or territory housing authority (11%) (table 16).
The Canadian National Occupancy Standard is widely used internationally as an indicator of housing utilisation (see paragraphs 30 to 32 of the Explanatory Notes). Only 3% of Australian households were assessed as needing one or more extra bedrooms to meet this occupancy standard. More than three quarters (78%) of households occupied dwellings which had more bedrooms than were needed to accommodate the occupants according to the standards (table 14).
Households who owned their home without a mortgage were more likely than those with other tenures to have one or more bedrooms spare (90%). Households renting from a state or territory housing authority were the most likely tenure group (45%) to have only the required number of bedrooms. Six percent of private renters required one or more additional bedrooms (table 14).
Sixty-seven percent of couples living with dependent children had at least one spare bedroom, compared to 48% of one parent households with dependent children. Of the latter group, 11% required one or more additional bedrooms. Multiple family households were the most likely to require additional bedrooms (22%). On average, dwellings for couples with dependent and non-dependent children contained the highest number of bedrooms (3.9) and housed an average of 4.7 people (table 16).
In this publication, housing costs are defined as the sum of: rent payments; rate payments (water and general); and mortgage or unsecured loan payments, if the initial purpose of the loan was primarily to buy, add, or alter the dwelling. Owners that have a mortgage where the purpose of the mortgage, when initially taken out was not primarily housing related, are categorised as owners with a mortgage but their mortgage repayments are not included in their housing costs.
The mean (average) weekly housing costs for all households was $265 in 2011-12 (table 1). There is, however, considerable variation in housing costs with 38% of all households paying $75 or less per week (table 5).
For owners without a mortgage, the average weekly housing costs were $40, which represented 3% of average gross weekly income for those households (table 1 and 2). Owners with a mortgage paid an average of $432 per week on housing costs, which represented 18% of their average gross weekly income, although about 24% of this amount was repaying the principal outstanding on the loan.
Households renting from private landlords paid an average of $347 per week, representing 20% of their average gross income. Households renting from state and territory housing authorities paid an average of $136 per week, representing 19% of their average gross 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 effectively lowers the total housing costs by about 7% for all private renters. See paragraph 22 to 23 of the Explanatory Notes for more detail.
Changes since 1994-95
Between 1994-95 and 2011-12, private renters experienced a 57% (or $126) increase in average weekly housing costs, after adjustment for inflation. For other tenure types, there was an overall increase of 43% (or $129) for owners with a mortgage and 40% (or $39) for public renters (table 1).
For owners with a mortgage and private renters, the proportion of income spent on housing costs in 2011-12 is the same as in 1994-95, at 18% and 20% respectively. However, for public renters it represented an increase in the proportion of income spent on housing costs compared to 1994-95, from 17% to 19% (table 2). 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.
Lower income households
Lower income households are defined in this publication as those containing the 30% of people with equivalised disposable household income between the 10th and 40th percentiles.
Although this group reported lower housing costs, on average, than all households, their housing costs represented a greater proportion of their gross weekly income. Lower income owners with a mortgage paid an average of $314 a week in housing costs, which represented 26% of their gross weekly income, while all owners with a mortgage paid an average of $432, or 18% of their gross weekly income, on housing costs (table 5).
Similarly, lower income households renting from private landlords paid an average of $295 a week on housing costs, which represented 30% of their gross weekly income, while all private renters paid an average of $347, or 20% of their gross weekly income, on housing costs (graph 7).
As a proportion of gross household income, housing costs of lower income owners with a mortgage declined from 27% in 1994-95 to 24% in 1999-00 before rising to 26% in 2011-12 (graph 7).
Housing costs as a proportion of income for lower income private renters fell from 34% in 1994-95 to 28% in 2007-08, then rose to 30% in 2011-12 (graph 7).
States and territories
Mean housing costs were higher in the capital cities of Australia than in the rest of the states and territories. The differences between regions often reflect differences in property values, rental prices, urban settlement and tenure patterns. In New South Wales, Sydney housing costs were 71% higher than the rest of the state. In contrast, Brisbane housing costs were only 24% higher than the rest of Queensland (table 20 and 21) Non-capital city areas of Queensland had higher housing costs than the national average of non-capital city areas. This is influenced by Queensland's high level of urban settlement outside of Brisbane.
VALUE OF DWELLING
In the SIH, owners were asked to estimate the value of their dwelling. The estimate they provided may differ from valuations made by accredited valuers or the actual sale price of the dwelling. The extent of the difference has not been measured and therefore some care needs to be taken when using these data.
In 2011-12, the median value of the 5.8 million owner occupied dwellings was $450,000, a decrease of 3% on the CPI adjusted value of $464,000 in 2009-10, and a 104% increase on the corresponding value in 1994-95 (table 1). The CPI adjusted value of the median mortgage outstanding increased by 5% between 2009-10 and 2011-12 (from $190,000 to $200,000), and increased by 124% between 1994-95 and 2011-12 (table 1).
The median value of dwellings in Australian capital cities was $500,000 in 2011-12. The median value in Sydney ($600,000) and Canberra ($550,000) were above the national capital city average. Adelaide ($425,000) and Hobart ($400,000) had median dwelling values below the national capital city average (table 26).
RECENT HOME BUYERS
In 2011-12, approximately 988,000 households purchased their dwelling in the three years prior to the survey, down from 1,073,800 in 2009-10. These households are divided into first home buyers (36%) and changeover buyers (64%). Most first home buyers were young households with a reference person aged under 35 years (65%). Only 11% of first home buyer households had a reference person aged 45 years and over. In contrast, 52% of changeover buyer households had a reference person aged 45 years and over.
The median value of recently purchased dwellings was $370,000 for first home buyers and $500,000 for changeover buyers (table 34). New dwellings purchased by recent home buyers had a higher median value ($500,000) than established dwellings purchased by recent home buyers ($420,000) (table 34).
Average housing costs for first home buyers and changeover buyers were $470 and $443 per week respectively (table 32). This is consistent with a higher proportion of first home buyers having a mortgage (94%) than for changeover buyers (74%).
First home buyers with a mortgage
Couple families with dependent children and couple only households made up the majority (65%) of first home buyers with a mortgage, with 47% of these couple households including dependent children. A further 22% were lone person households. There has been little change in the family composition of first home buyer households since 1995-96.
In 2011-12, first home buyers with a mortgage lived in smaller dwellings, on average (3.0 bedrooms), than either change over buyers (3.3 bedrooms) or all owner households (3.3 bedrooms) (table 36).
DENDOGRAM OF SELECTED HOUSEHOLD CHARACTERISTICS
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