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

Summary

This project explored two issues: (1) the dynamics of housing affordability in Australia; and (2) the potential of initiatives to improve the supply of affordable rental housing. Both topics involved using 2001-2006 data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. Findings suggest that most people in housing stress escape within a year, however there is a high chance of return. Only a minority of people experience housing affordability stress on a long term basis. In relation to affordable rental housing, about 1 in 4 property investments are withdrawn from the rental market within 12 months. Thus tenants of approximately one quarter of all rental properties occupy insecure accommodation. Low income, and negatively geared property investors are more likely to make early exits from the rental housing stock.


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

Research and Policy Bulletin

Research & Policy Bulletin

Issue 127: What makes a landlord decide to invest and dis-invest in private rental housing?

Landlord investment decisions are linked to financial costs and retirement status. Tax, monetary and retirement incomes policies are all relevant to increasing the supply of private rental investment.

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296 KB PDF Document

Research and Policy Bulletin

Research & Policy Bulletin

Issue 129: How long does housing affordability stress last?

Families with mortgages are the most susceptible to prolonged housing stress, and those experiencing persistent housing stress are usually on low incomes.

Download nowDownload the PDF
287 KB PDF Document

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

Download now Research and Policy Bulletin: Issue 127: What makes a landlord decide to invest and dis-invest in private rental housing?
296 KB PDF Document

Download now Research and Policy Bulletin: Issue 129: How long does housing affordability stress last?
287 KB PDF Document

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