Movements in and out of housing affordability stress and dynamic modelling of initiatives to improve the supply of affordable housing

Summary

For all but a small minority of Australians, housing affordability stress is a temporary phenomenon, with most improving their housing affordability circumstances within one year. However, there is a high probability of a return to stress conditions. Such a finding has important implications for the design and duration of housing assistance.


Project Number: 30521
Research Theme: Housing_Affordability, Demographics_and_Modelling
Project Leader: Wood, Gavin
Funding Year: 2008
Research Centre: RMIT-NATSEM

Description

This research investigates the dynamics of housing affordability in Australia over the period 2001–06 by tracking the housing affordability trajectories of a nationally representative sample of Australians across a period of six years, using the Household, Income and Labour Dynamics in Australia (HILDA) survey.

The key findings of the research are:

  • Most Australians in housing affordability stress escape within a year. However, there is a ‘hard core’– albeit small in number – for whom housing affordability stress is a more permanent feature. Among those exiting unaffordable housing circumstances there is a high chance of return.
  • Most Australians already in affordable housing in 2001 tended to survive in affordable housing over a spell of five or so years. A minority do drop into housing affordability stress but manage to quickly climb back into affordable housing.
  • Residential moves made during spells living in unaffordable housing tend to alleviate housing cost burdens because such households trade down in the housing market. Renters are much more likely to move and, hence, they have better chances of escaping housing affordability stress than home buyers, who tend to be less mobile.
  • Precarious housing affordability circumstances are particularly evident among younger couples with dependent children, a stage in the life cycle that is associated with pressing spending needs.

More Information

Download now Final Report: No. 133: The dynamics of housing affordability: movements in and out of housing affordability stress 2001-2006
574 KB PDF Document

Download now Final Report: No. 142: Factors shaping the decision to become a landlord and retain rental investments
611 KB PDF Document

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