Appendices

Appendix 1 - Terms of Reference, National Housing Supply Council
Appendix 2 - Summary data
Appendix 3 - Data sources and methods
Appendix 4 - Housing hotspots
Appendix 5 - Affordability measures

Appendix 1: Terms of Reference, National Housing Supply Council

Terms of Reference

Rationale

The Commonwealth Government is concerned to improve housing affordability for home buyers and renters. The Government recognises that better information on supply and demand at local, regional, State and national levels could play a valuable role in improving affordability by guiding policy, practice and market behaviour. The Government has established the National Housing Supply Council (the Council) to aggregate and assess data on housing supply and demand and to report to the Minister for Housing on its findings.

The Council of Australian Governments (COAG) supports the establishment of the Council and has agreed to the establishment of a Working Group of State, Territory and Commonwealth officials to ensure data needed by the Council is supplied to it.

Through its various agencies, the Commonwealth has considerable information on the demand side – notably demographic, immigration and household income and expenditure data – as well as some supply side information – such as Australian Bureau of Statistics (ABS) data on housing approvals and commencements and Australian Institute of Health and Welfare (AIHW) data on social housing and responses to homelessness. States and Territories know about the state of land supply, zoning and planning frameworks, and about residential infrastructure requirements and financing. The Council will access and assess these and other data to analyse the balance between demand and supply and help governments at all levels to address housing affordability in an effective and sustainable way. To the extent feasible, the Council will undertake this analysis at both aggregate and disaggregate level.

Role of the National Housing Supply Council

The Council will provide forecasts, analysis and policy advice to the Minister for Housing and publish an annual State of Supply Report on the adequacy of land supply and construction activity to meet demand and improve affordability over a 20-year forecast period. The Council will:

adopt consistent national standards in measuring and assessing the supply of land and housing and their relationship with housing demand and affordability
provide a detailed assessment of trends in land availability, construction activity and housing affordability
identify possible ways of ameliorating obstacles and otherwise improving the supply response
advise on research findings and desirable additional research on housing demand, supply and affordability at regional, State and national levels.

Accordingly, the Council’s State of Supply Report will provide consistent data on trends and forecasts of housing demand and supply at national, State and Territory and local scales. The Report will incorporate assessments of, among other things:

demographic factors influencing demand such as growth and structure of households, immigration rates and patterns, and the movement of households between cities, regions, State and Territories
economic factors (cyclical and structural) influencing demand, supply and affordability such as the growth and distribution of household incomes, relative returns from investment in housing, the availability and cost of finance for developers and consumers, business and consumer confidence, and the cost, availability and productivity of land, labour and materials
development control arrangements – planning and zoning, development assessment, building approval processes, building standards and related market practices – affecting the release of land, development activity and redevelopment potential, including with respect to the variety of different types, sizes, densities and prices of housing
infrastructure provision and financing
factors influencing or inhibiting industry innovation in housing and community-building product
practices and output in the public and not-for-profit housing sectors and at the low cost end of the private rental and home purchase markets.

In considering these matters, the Council will focus particularly on the factors affecting the supply and affordability of housing for families and other households in the lower half of the income distribution as well as on the adequacy of, and movement in cost of, housing supply generally.

In considering housing affordability and factors making housing more or less affordable, the Council will consider the immediate and long run price of housing relative to household incomes. Accordingly, it will attempt to address house and land prices, residential rents, interest rates and other recurrent costs (including of utilities, transport costs and other matters affecting the ‘sustainability’ of housing in various locations).

The Minister for Housing may request specific advice from the Council.

Modus Operandi

The Council will be supported by a dedicated budget determined by the Minister and a Secretariat in the Commonwealth Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) as well as by the Housing Data Working Group and the presence at all Council meetings of senior ex-officio representatives of the Commonwealth Treasury and FaHCSIA.

The Council aims to develop and maintain strong relationships with representatives of the building and development industries, planning and development control agencies, key policy agencies, and other key interest groups. It also aims to develop strong working relationships with data and research bodies, including Australian Bureau of Statistics (ABS), Australian Institute of Health and Welfare (AIHW) and the Australian Housing and Urban Research Institute (AHURI).

In the lead-up to its first report, the Council will meet as often as required to establish standards and procedures, initiate data gathering, analysis, modelling and research, establish a strong working relationship with its Secretariat and progress the inaugural report due by the end of 2008.

In the longer run, the Council aims to meet four times per year at times designed to set the agenda and work programme for the annual State of Supply Report, monitor and guide progress, assist with analysis and the development of findings, consider policy and practice implications and authorise the final report.

As far as is practically possible, the Council will meet in a variety of locations to facilitate the development of strong relations with and the engagement of key interested parties.

Council reports will be presented to the Minister and subsequently published on the internet. They will be the subject of an annual national conference – possibly as part of the National Housing Conference or an industry conference with open attendance – to stimulate discussion, innovation in policy and practice, and continuous improvement in the Council’s analysis and advice.

Minutes of meetings will be maintained recording a summary of key discussion points, agreed decisions and actions. Progress reports including the Minutes will be provided to the Minister for Housing after each meeting.

The inaugural State of Supply Report is likely to be ‘high level’ and less detailed than subsequent reports due to the likely early unavailability of detailed information in all areas of interest and the relatively short time available for the report’s production. It will nonetheless provide:

an assessment of the current balance between housing demand and supply
likely trends in demand, supply, affordability and their underlying drivers
an early assessment of major inhibitors and contributors to better balance housing supply and affordability.

Subsequent reports will benefit from richer and more rigorous data, the development of data analysis and modelling for the Council, and additional time for consideration and consultation with other experts.

Members of the National Housing Supply Council

The Council comprises the Chair plus eight members. Appointments to the Council are made by the Minister for Housing in consultation with the Treasurer. The Chair is appointed for up to 3 years and Members for 2 years. The Minister, in consultation with the Chair, will elect a deputy Chair. The Chair and members will be appointed as individuals and not as a representative of organisations or businesses.

The Chair is responsible for convening and chairing the Council meetings and presenting the annual State of Supply Report to the Minister for Housing.

Members will be appointed for their individual capacity and expertise in an area relevant to the housing industry as set out below. Members are responsible for attending meetings and contributing to the work of the Council by offering insight and guidance based on their expertise.

Sector representation sought in the membership of the council encompasses the housing, property and building and construction industry, planning and development, social welfare and community housing, banking and finance, and housing research.

Current members of the Council appointed May 2008 are:

Dr Owen Donald, Chairman	Former Director of Housing, Victoria; former CEO, Australian Housing & Urban Research Institute
Brendan Crotty	Former Managing Director, Australand Property Group
Saul Eslake	Chief Economist, Australia and New Zealand Banking Group Limited
Sue Holliday	Former Director-General of Planning, NSW, former (until April 2008) National President, Planning Institute of Australia
Chris Lamont	Chief Executive, Policy, Housing Industry Association.
Marcus Spiller	Director, SGS Economics and Planning
Marion Thompson	Land Release Coordinator, Urban Development Coordinator, WA Department of Planning and Infrastructure
Stuart Wilson	Managing Director, Wilson Homes, National Industry Skills Committee, Proprietor, Wilson Building Consultants
Dr Judy Yates	Housing Economist, University of Sydney

In addition, the following senior Commonwealth officers attend Council meetings:

Geoff Leeper	Deputy Secretary, FaHCSIA, ex-officio participant observer
David Gruen	Executive Director, Treasury, ex-officio participant observer
Michelle Weston	Head of NHSC Secretariat, FaHCSIA

Appendix 2: Summary data

Download Appendix 2: Summary data as a XLS spreadsheet - XLS [128kB]

1. Summary data

Table A1.1: Summary of the main supply and demand projection data used in the report
Underlying demand				Supply of dwellings
Medium household growth projection				Medium trend adjusted for demolition projection
	Annual increase in underlying demand	Cumulative increase in underlying demand	Total underlying demand	Annual increase in dwelling completions	Total stock at 30 June, occupied dwellings and new additions	Total stock at 30 June Including unoccupied dwellings
	(households)			(dwellings)
2008	149,000	n.a.	8,347,000	129,000	8,029,000	8,860,000
2009	152,000	152,000	8,499,000	129,000	8,158,000	8,989,000
2010	153,000	305,000	8,652,000	130,000	8,288,000	9,119,000
2011	155,000	460,000	8,807,000	131,000	8,419,000	9,250,000
2012	155,000	615,000	8,962,000	131,000	8,550,000	9,381,000
2013	156,000	771,000	9,118,000	132,000	8,682,000	9,513,000
2014	156,000	927,000	9,274,000	133,000	8,815,000	9,646,000
2015	157,000	1,084,000	9,430,000	133,000	8,948,000	9,779,000
2016	157,000	1,240,000	9,587,000	134,000	9,082,000	9,913,000
2017	157,000	1,397,000	9,744,000	135,000	9,217,000	10,048,000
2018	156,000	1,553,000	9,900,000	135,000	9,352,000	10,183,000
2019	157,000	1,710,000	10,057,000	136,000	9,488,000	10,319,000
2020	156,000	1,866,000	10,213,000	137,000	9,625,000	10,456,000
2021	156,000	2,022,000	10,369,000	137,000	9,762,000	10,593,000
2022	155,000	2,177,000	10,524,000	138,000	9,900,000	10,731,000
2023	154,000	2,332,000	10,678,000	139,000	10,039,000	10,870,000
2024	152,000	2,484,000	10,830,000	139,000	10,178,000	11,009,000
2025	149,000	2,632,000	10,979,000	140,000	10,318,000	11,149,000
2026	145,000	2,778,000	11,125,000	141,000	10,459,000	11,290,000
2027	143,000	2,921,000	11,267,000	142,000	10,601,000	11,432,000
2028	139,000	3,060,000	11,407,000	142,000	10,743,000	11,574,000

Source: National Housing Supply Council estimates based on McDonald–Temple medium household growth scenario; NHSC estimates of net dwelling completions (adjusted for demolitions).

2. Demand data

Table A2.1: Temporary entrants present in Australia as at 30 June, 1999 to 2008
Year	Visa major group	Total
1999	Temporary resident	101,817
	Student	110,638
	Visitor	165,124
	Other temporary entrant/Not stated	65,119
	Total 1999	442,698
2000	Temporary resident	118,497
	Student	119,692
	Visitor	178,753
	Other temporary entrant/Not stated	69,234
	Total 2000	486,176
2001	Temporary resident	126,151
	Student	136,569
	Visitor	192,811
	Other temporary entrant/Not stated	67,468
	Total 2001	522,999
2002	Temporary resident	125,843
	Student	151,146
	Visitor	171,843
	Other temporary entrant/Not stated	69,498
	Total 2002	518,330
2003	Temporary resident	130,838
	Student	171,553
	Visitor	165,309
	Other temporary entrant/Not stated	65,919
	Total 2003	533,619
2004	Temporary resident	136,383
	Student	177,233
	Student guardian	478
	Visitor	166,153
	Other temporary entrant/Not stated	58,086
	Total 2004	538,333
2005	Temporary resident	147,763
	Student	190,272
	Student guardian	1,066
	Visitor	162,183
	Other temporary entrant/Not stated	51,585
	Total 2005	552,869
2006	Temporary resident	169,271
	Student	207,823
	Student guardian	1,383
	Visitor	170,439
	Other temporary entrant/Not stated	51,452
	Total 2006	600,368
2007	Temporary resident	203,499
	Student	248,500
	Student guardian	2,089
	Visitor	173,601
	Other temporary entrant/Not stated	59,603
	Total 2007	687,292
2008	Temporary resident	245,479
	Student	317,897
	Student guardian	3,038
	Visitor	177,974
	Other temporary entrant/Not stated	65,240
	Total 2008	809,628

Note: ‘Temporary resident’ in these tables includes Business Long Stay (457) visas, Working Holiday Maker (417) visas and social, cultural or international relations purposes. ‘Visitor’ includes business visitors. ‘Other temporary entrant’ includes bridging visa holders.

Source: Department of Immigration and Citizenship unpublished, 2008.

Table A2.2: Projections of underlying demand based on low, medium and high household growth scenarios: annual increase in underlying demand and total underlying demand projections, Australia, 2008 to 2028
	Annual increase in underlying demand (households)			Total underlying demand (households)
	Low household growth	Medium household growth	High household growth	Low household growth	Medium household growth	High household growth
2008	133,000	149,000	149,000	8,320,000	8,347,000	8,347,000
2009	136,000	152,000	171,000	8,456,000	8,499,000	8,518,000
2010	138,000	153,000	173,000	8,594,000	8,652,000	8,691,000
2011	140,000	155,000	175,000	8,734,000	8,807,000	8,866,000
2012	141,000	155,000	176,000	8,876,000	8,962,000	9,041,000
2013	143,000	156,000	176,000	9,018,000	9,118,000	9,218,000
2014	143,000	156,000	177,000	9,162,000	9,274,000	9,394,000
2015	145,000	157,000	177,000	9,307,000	9,430,000	9,572,000
2016	146,000	157,000	178,000	9,453,000	9,587,000	9,749,000
2017	147,000	157,000	178,000	9,600,000	9,744,000	9,927,000
2018	147,000	156,000	178,000	9,747,000	9,900,000	10,105,000
2019	148,000	157,000	178,000	9,895,000	10,057,000	10,283,000
2020	149,000	156,000	178,000	10,044,000	10,213,000	10,461,000
2021	150,000	156,000	178,000	10,195,000	10,369,000	10,640,000
2022	150,000	155,000	177,000	10,345,000	10,524,000	10,817,000
2023	151,000	154,000	177,000	10,495,000	10,678,000	10,994,000
2024	149,000	152,000	175,000	10,644,000	10,830,000	11,168,000
2025	147,000	149,000	171,000	10,791,000	10,979,000	11,340,000
2026	145,000	145,000	168,000	10,936,000	11,125,000	11,508,000
2027	143,000	143,000	166,000	11,080,000	11,267,000	11,673,000
2028	141,000	139,000	162,000	11,221,000	11,407,000	11,836,000

Note: Shaded area depicts the main projection series used in the report.

Source: National Housing Supply Council estimates based on McDonald–Temple medium household growth scenario.

Table A2.3: Projections of underlying demand based on *low* household growth, by State and Territory, 2008 to 2028
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Australia
(households)
2008	2,676,000	2,058,000	1,669,000	658,000	844,000	206,000	76,000	133,000	8,320,000
2009	2,703,000	2,092,000	1,714,000	665,000	861,000	209,000	77,000	135,000	8,456,000
2010	2,730,000	2,127,000	1,760,000	672,000	878,000	211,000	78,000	137,000	8,594,000
2011	2,758,000	2,162,000	1,808,000	679,000	895,000	214,000	80,000	139,000	8,734,000
2012	2,785,000	2,197,000	1,856,000	686,000	913,000	216,000	81,000	141,000	8,876,000
2013	2,812,000	2,233,000	1,906,000	694,000	930,000	219,000	82,000	142,000	9,018,000
2014	2,839,000	2,269,000	1,957,000	701,000	948,000	221,000	83,000	144,000	9,162,000
2015	2,865,000	2,305,000	2,009,000	708,000	966,000	224,000	84,000	146,000	9,307,000
2016	2,892,000	2,341,000	2,061,000	715,000	984,000	226,000	86,000	148,000	9,453,000
2017	2,918,000	2,378,000	2,115,000	722,000	1,002,000	229,000	87,000	149,000	9,600,000
2018	2,944,000	2,415,000	2,170,000	729,000	1,020,000	231,000	88,000	151,000	9,747,000
2019	2,970,000	2,451,000	2,225,000	736,000	1,038,000	234,000	89,000	152,000	9,895,000
2020	2,996,000	2,488,000	2,282,000	743,000	1,056,000	236,000	90,000	154,000	10,044,000
2021	3,021,000	2,526,000	2,339,000	749,000	1,075,000	238,000	91,000	155,000	10,195,000
2022	3,046,000	2,563,000	2,398,000	756,000	1,093,000	240,000	92,000	157,000	10,345,000
2023	3,070,000	2,600,000	2,457,000	763,000	1,111,000	242,000	93,000	158,000	10,495,000
2024	3,094,000	2,637,000	2,517,000	769,000	1,130,000	244,000	94,000	159,000	10,644,000
2025	3,116,000	2,673,000	2,577,000	775,000	1,148,000	246,000	95,000	161,000	10,791,000
2026	3,137,000	2,709,000	2,638,000	781,000	1,166,000	248,000	96,000	162,000	10,936,000
2027	3,157,000	2,745,000	2,698,000	787,000	1,183,000	250,000	97,000	163,000	11,080,000
2028	3,176,000	2,780,000	2,759,000	792,000	1,201,000	252,000	98,000	164,000	11,221,000

Table A2.3: Projections of underlying demand based on *medium* household growth, by State and Territory, 2008 to 2028 (continued)
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Australia
(households)
2008	2,692,000	2,063,000	1,661,000	661,000	853,000	206,000	77,000	135,000	8,347,000
2009	2,729,000	2,100,000	1,702,000	670,000	874,000	209,000	78,000	138,000	8,499,000
2010	2,767,000	2,136,000	1,743,000	679,000	895,000	211,000	80,000	140,000	8,652,000
2011	2,807,000	2,172,000	1,785,000	687,000	917,000	214,000	82,000	143,000	8,807,000
2012	2,847,000	2,209,000	1,828,000	696,000	938,000	216,000	83,000	145,000	8,962,000
2013	2,888,000	2,245,000	1,871,000	704,000	959,000	219,000	85,000	148,000	9,118,000
2014	2,928,000	2,281,000	1,914,000	713,000	981,000	221,000	87,000	150,000	9,274,000
2015	2,968,000	2,318,000	1,957,000	721,000	1,002,000	223,000	88,000	153,000	9,430,000
2016	3,009,000	2,354,000	2,001,000	729,000	1,024,000	226,000	90,000	155,000	9,587,000
2017	3,049,000	2,391,000	2,044,000	738,000	1,045,000	228,000	91,000	158,000	9,744,000
2018	3,089,000	2,427,000	2,088,000	746,000	1,066,000	230,000	93,000	160,000	9,900,000
2019	3,130,000	2,464,000	2,132,000	754,000	1,087,000	232,000	94,000	162,000	10,057,000
2020	3,170,000	2,500,000	2,176,000	763,000	1,109,000	235,000	96,000	165,000	10,213,000
2021	3,210,000	2,537,000	2,220,000	771,000	1,130,000	237,000	97,000	167,000	10,369,000
2022	3,250,000	2,573,000	2,264,000	779,000	1,151,000	239,000	99,000	169,000	10,524,000
2023	3,289,000	2,609,000	2,309,000	787,000	1,172,000	241,000	101,000	172,000	10,678,000
2024	3,328,000	2,645,000	2,353,000	795,000	1,192,000	243,000	102,000	174,000	10,830,000
2025	3,365,000	2,679,000	2,396,000	802,000	1,213,000	244,000	104,000	176,000	10,979,000
2026	3,401,000	2,714,000	2,438,000	809,000	1,233,000	246,000	105,000	178,000	11,125,000
2027	3,437,000	2,747,000	2,480,000	816,000	1,252,000	248,000	107,000	180,000	11,267,000
2028	3,471,000	2,780,000	2,521,000	823,000	1,272,000	249,000	108,000	182,000	11,407,000

Table A2.3: Projections of underlying demand based on *high* household growth, by State and Territory, 2008 to 2028 (continued)
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Australia
(households)
2008	2,692,000	2,063,000	1,661,000	661,000	853,000	206,000	77,000	135,000	8,347,000
2009	2,735,000	2,105,000	1,705,000	671,000	877,000	209,000	79,000	138,000	8,518,000
2010	2,779,000	2,147,000	1,751,000	682,000	901,000	212,000	80,000	140,000	8,691,000
2011	2,825,000	2,188,000	1,796,000	692,000	925,000	214,000	82,000	143,000	8,866,000
2012	2,872,000	2,229,000	1,843,000	701,000	950,000	217,000	84,000	146,000	9,041,000
2013	2,918,000	2,271,000	1,889,000	711,000	974,000	219,000	86,000	148,000	9,218,000
2014	2,965,000	2,313,000	1,937,000	721,000	998,000	222,000	87,000	151,000	9,394,000
2015	3,012,000	2,355,000	1,984,000	731,000	1,023,000	225,000	89,000	153,000	9,572,000
2016	3,059,000	2,397,000	2,031,000	741,000	1,047,000	227,000	91,000	156,000	9,749,000
2017	3,105,000	2,439,000	2,079,000	751,000	1,072,000	230,000	92,000	159,000	9,927,000
2018	3,152,000	2,481,000	2,127,000	761,000	1,096,000	232,000	94,000	161,000	10,105,000
2019	3,200,000	2,524,000	2,175,000	770,000	1,120,000	234,000	96,000	164,000	10,283,000
2020	3,247,000	2,566,000	2,223,000	780,000	1,145,000	237,000	97,000	166,000	10,461,000
2021	3,294,000	2,608,000	2,272,000	790,000	1,169,000	239,000	99,000	169,000	10,640,000
2022	3,340,000	2,650,000	2,320,000	800,000	1,193,000	241,000	101,000	171,000	10,817,000
2023	3,387,000	2,692,000	2,369,000	809,000	1,217,000	243,000	103,000	174,000	10,994,000
2024	3,432,000	2,734,000	2,417,000	818,000	1,241,000	246,000	104,000	176,000	11,168,000
2025	3,477,000	2,775,000	2,464,000	827,000	1,265,000	248,000	106,000	178,000	11,340,000
2026	3,520,000	2,815,000	2,511,000	836,000	1,288,000	249,000	108,000	180,000	11,508,000
2027	3,563,000	2,855,000	2,558,000	844,000	1,311,000	251,000	109,000	183,000	11,673,000
2028	3,604,000	2,893,000	2,603,000	853,000	1,334,000	253,000	111,000	185,000	11,836,000

Source: National Housing Supply Council estimates based on McDonald–Temple low, medium and high household growth projections, 2008.

3. Supply data

Table A3.1: Projections of dwelling completions and net completions (adjusted for demolitions), Australia, 2008 to 2028 as at 30 June
	Projected dwelling completions			Projected net dwelling completions (adjustedfor demolitions)
	Historical low rate projection (a)	Medium trend projection (b)	Historical high rate projection (c)	Historical low rate projection adjusted for demolition rate	Medium trend projection adjusted for demolition rate	Historical high rate projection adjusted for demolition rate
2008	118,000	153,000	183,000	99,000	129,000	154,000
2009	118,000	154,000	184,000	100,000	129,000	155,000
2010	119,000	155,000	185,000	100,000	130,000	155,000
2011	120,000	155,000	186,000	101,000	131,000	156,000
2012	120,000	156,000	187,000	101,000	131,000	157,000
2013	121,000	157,000	188,000	102,000	132,000	158,000
2014	122,000	158,000	189,000	102,000	133,000	159,000
2015	122,000	159,000	190,000	103,000	133,000	159,000
2016	123,000	159,000	191,000	103,000	134,000	160,000
2017	123,000	160,000	192,000	104,000	135,000	161,000
2018	124,000	161,000	193,000	104,000	135,000	162,000
2019	125,000	162,000	193,000	105,000	136,000	163,000
2020	125,000	163,000	194,000	105,000	137,000	164,000
2021	126,000	163,000	195,000	106,000	137,000	164,000
2022	126,000	164,000	196,000	106,000	138,000	165,000
2023	127,000	165,000	197,000	107,000	139,000	166,000
2024	128,000	166,000	198,000	107,000	139,000	167,000
2025	128,000	167,000	199,000	108,000	140,000	168,000
2026	129,000	167,000	200,000	108,000	141,000	168,000
2027	130,000	168,000	201,000	109,000	142,000	169,000
2028	130,000	169,000	202,000	109,000	142,000	170,000

Note: Shaded area depicts the main projection series used in the report.

(a) A level of dwelling completions at a rate similar to the minimum historic annual level of completions over the period 1 July 1980 to 31 December 2007.

(b) Average long-term growth in dwelling completions based on the trend in completions over the period 1 July 1980 to 31 December 2007.

(c) A level of dwelling completions at a rate similar to the maximum historic annual level of completions in over the period 1 July 1980 to 31 December 2007.

Source: Projections are based on Australian Bureau of Statistics, Building Activity, Australia, December 2007, cat. no. 8752.0, ABS, Canberra, 2008 and on NHSC estimates for completions net of demolitions. Projection methodology is discussed in Appendix 3.

Table A3.2: Medium trend projection of dwelling completions, by State and Territory, 2006 to 2028
Year	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Aust
2006	35,000	42,000	39,000	11,000	22,000	3,000	1,000	2,000	154,000
2007	30,000	39,000	39,000	10,000	25,000	2,000	1,000	2,000	148,000
2008	34,000	40,000	40,000	10,000	23,000	2,000	1,000	3,000	153,000
2009	40,000	40,000	38,000	9,000	21,000	2,000	1,000	2,000	154,000
2010	40,000	41,000	38,000	9,000	22,000	2,000	1,000	2,000	155,000
2011	40,000	41,000	39,000	9,000	22,000	2,000	1,000	2,000	155,000
2012	40,000	42,000	39,000	9,000	22,000	2,000	1,000	2,000	156,000
2013	40,000	42,000	39,000	9,000	22,000	2,000	1,000	2,000	157,000
2014	40,000	43,000	39,000	9,000	23,000	2,000	1,000	2,000	158,000
2015	40,000	43,000	40,000	9,000	23,000	2,000	1,000	2,000	159,000
2016	40,000	43,000	40,000	9,000	23,000	2,000	1,000	2,000	159,000
2017	40,000	44,000	40,000	9,000	23,000	2,000	1,000	2,000	160,000
2018	40,000	44,000	40,000	9,000	23,000	1,000	1,000	2,000	161,000
2019	40,000	45,000	41,000	9,000	24,000	1,000	1,000	2,000	162,000
2020	40,000	45,000	41,000	9,000	24,000	1,000	1,000	2,000	163,000
2021	40,000	46,000	41,000	9,000	24,000	1,000	1,000	2,000	163,000
2022	40,000	46,000	41,000	9,000	24,000	1,000	1,000	2,000	164,000
2023	40,000	47,000	42,000	9,000	25,000	1,000	1,000	2,000	165,000
2024	39,000	47,000	42,000	9,000	25,000	1,000	1,000	2,000	166,000
2025	39,000	48,000	42,000	8,000	25,000	1,000	1,000	2,000	167,000
2026	39,000	48,000	42,000	8,000	25,000	1,000	0	2,000	167,000
2027	39,000	49,000	43,000	8,000	26,000	1,000	0	2,000	168,000
2028	39,000	49,000	43,000	8,000	26,000	1,000	0	2,000	169,000

Source: Projections are based on trend data for dwelling completions from Australian Bureau of Statistics, Building Activity, Australia, December 2007, cat. no. 8752.0, ABS, Canberra, 2008

Table A3.3: Medium trend projection of dwelling completions, adjusted for demolitions (net completions), by State and Territory, 2006 to 2028
Year	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Aust
2006	28,000	34,000	38,000	8,000	17,000	2,000	0	2,000	129,000
2007	23,000	32,000	38,000	7,000	20,000	2,000	1,000	2,000	124,000
2008	26,000	33,000	39,000	7,000	19,000	2,000	0	2,000	129,000
2009	31,000	33,000	38,000	6,000	17,000	2,000	0	2,000	129,000
2010	31,000	34,000	38,000	6,000	17,000	2,000	0	2,000	130,000
2011	31,000	34,000	38,000	6,000	18,000	1,000	0	2,000	131,000
2012	31,000	34,000	38,000	6,000	18,000	1,000	0	2,000	131,000
2013	31,000	35,000	39,000	6,000	18,000	1,000	0	2,000	132,000
2014	31,000	35,000	39,000	6,000	18,000	1,000	0	2,000	133,000
2015	31,000	36,000	39,000	6,000	18,000	1,000	0	2,000	133,000
2016	31,000	36,000	39,000	6,000	19,000	1,000	0	2,000	134,000
2017	31,000	36,000	40,000	6,000	19,000	1,000	0	2,000	135,000
2018	31,000	37,000	40,000	6,000	19,000	1,000	0	2,000	135,000
2019	31,000	37,000	40,000	6,000	19,000	1,000	0	2,000	136,000
2020	31,000	38,000	40,000	6,000	9,000	1,000	0	2,000	137,000
2021	31,000	38,000	40,000	6,000	19,000	1,000	0	2,000	137,000
2022	31,000	38,000	41,000	6,000	20,000	1,000	0	2,000	138,000
2023	31,000	39,000	41,000	6,000	20,000	1,000	0	2,000	139,000
2024	31,000	39,000	41,000	6,000	20,000	1,000	0	2,000	139,000
2025	31,000	40,000	41,000	6,000	20,000	1,000	0	2,000	140,000
2026	31,000	40,000	42,000	6,000	20,000	1,000	0	2,000	141,000
2027	31,000	40,000	42,000	6,000	21,000	1,000	0	2,000	142,000
2028	31,000	41,000	42,000	6,000	21,000	1,000	0	2,000	142,000

Source: Projections are based on trend data for dwelling completions from Australian Bureau of Statistics, Building Activity, Australia, December 2007, cat. no. 8752.0, ABS, Canberra, 2008 adjusted for NHSC estimates of demolitions (net completions). Projection methodology is discussed in Appendix 3.

Table A3.4: Occupied private dwellings, by dwelling structure and household type, Australia, 2006 (per cent)
Dwelling structure	Household type
	Family households					Lone person household	Group household	Other household (a)	Total
	Couple family		One parent family	Other family	Total family
	without children	with children	One parent family	Other family	Total family
Separate house	19.8	28.1	8.4	0.8	57.0	13.0	2.0	2.8	74.8
Semi-detached, row or terrace house, townhouse, etc. with:
One storey	1.3	0.8	0.6	0.1	2.8	2.4	0.3	0.3	5.8
Two or more storeys	0.8	0.7	0.4	0.1	2.0	0.9	0.3	0.3	3.4
Total semi-detached	2.1	1.5	1.1	0.1	4.8	3.3	0.6	0.6	9.2
Flat, unit or apartment:
In a one- or two-storey block	1.2	0.6	0.6	0.1	2.5	3.6	0.5	0.7	7.2
In a three-storey block	0.6	0.3	0.2	0.1	1.3	1.3	0.3	0.5	3.3
In a four- or more storey block	0.8	0.3	0.2	0.1	1.3	1.2	0.3	0.8	3.5
Attached to a house	0.0	0.0	0.0	0.0	0.1	0.1	0.0	0.0	0.1
Total flat, unit or apartment	2.6	1.2	1.0	0.3	5.1	6.1	1.1	1.9	14.2
Other dwelling:
Caravan, cabin, houseboat	0.2	0.0	0.0	0.0	0.3	0.4	0.0	0.6	1.2
Improvised home, tent, sleepers out	0.0	0.0	0.0	0.0	0.0	0.1	0.0	0.1	0.2
House or flat attached to a shop, office, etc.	0.1	0.1	0.0	0.0	0.1	0.1	0.0	0.0	0.3
Total other dwelling	0.2	0.1	0.1	0.0	0.4	0.5	0.0	0.7	1.7
Total	24.9	30.9	10.5	1.2	67.4	22.9	3.7	6.0	100.0

(a) Comprises ‘Visitors only’ and ‘Other not classifiable’ households.

Source: Australian Bureau of Statistics, 2006 Census Tables, Australia, ‘Dwelling Structure by Household Composition and Family Composition for Time Series: Count of occupied private dwellings’, ABS cat. no. 2068.0,

Table A3.5: Occupied private dwellings, by dwelling structure and State and Territory, 2006 (number)
Dwelling structure	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Australia
Separate house	1,721,779	1,429,130	1,154,403	482,144	599,069	163,034	43,056	92,151	5,685,386
Semi-detached, row or terrace house, townhouse, etc. with:
One storey	121,969	123,745	59,739	53,960	62,170	5,937	4,163	10,261	441,944
Two or more storeys	119,381	48,938	53,719	10,786	17,140	1,925	2,351	6,361	260,613
Total semi-detached	241,350	172,683	113,458	64,746	79,310	7,862	6,514	16,622	702,557
Flat, unit or apartment:
In a one- or two-storey block	163,507	165,366	106,478	47,826	37,708	14,003	5,865	5,136	545,968
In a three-storey block	147,045	39,387	41,280	3,830	11,423	942	2,139	5,049	251,151
In a four- or more storey block	155,292	44,618	47,329	3,934	11,492	792	2,169	3,229	268,866
Attached to a house	4,653	1,877	1,496	580	625	575	105	405	10,322
Total flat, unit or apartment	470,497	251,248	196,583	56,170	61,248	16,312	10,278	13,819	1,076,307
Other dwelling:
Caravan, cabin, houseboat	23,489	9,392	35,945	4,738	14,939	1,021	5,107	177	94,819
Improvised home, tent, sleepers out	2,980	1,269	4,258	846	2,013	203	1,857	62	13,488
House or flat attached to a shop, office, etc.	8,352	5,230	2,686	921	958	614	248	25	19,034
Total other dwelling	34,821	15,891	42,889	6,505	17,910	1,838	7,212	264	127,341
Not stated	2,007	436	1,188	344	450	22	101	43	4,591
Total	2,470,454	1,869,388	1,508,521	609,909	757,987	189,068	67,161	122,899	7,596,182

Note: ‘Australia’ includes other territories and does not equal the sum of States and Territories

Source: Australian Bureau of Statistics (ABS), ‘Dwelling Type and Dwelling Structure by State/Territory)’, retrieved from CDATA 2006, cat. no. 2064.0, ABS, Canberra, 2007.

Table A3.5A: Government charges and infrastructure costs for broadhectare developments, Sydney, Melbourne and Brisbane, mid-1980s, mid-1990s and 2007
Sydney	Mid-1980s	Mid-1990s	2007
Section 94 contributions (a)	$3,000	$15,000	$45,000
State infrastructure charges	$0	$0	$33,000
Local government regulations	$2,000	$4,000	$8,000
Compliance costs Stamp duty	$0 $500	$0 $2,500	$7,500 $6,320
Total charges	$5,500	$21,500	$99,820
Median house price	$157,275	$196,750	$591,244
Proportion of charges to house price	3.5%	10.9%	16.9%
Melbourne	Mid-1980s	Mid-1990s	2007
State infrastructure charges	$0	$1,668	$5,400
Local government regulations	$2,000	$5,412	$15,000
Compliance costs	$0	$0	$6,600
Stamp duty	$500	$900	$2,750
Total charges	$2,400	$7,980	$29,750
Median house price	$124,435	$149,494	$440,688
Proportion of charges to house price	1.9%	5.3%	6.8%
Brisbane	Mid-1980s	Mid-1990s	2007
State infrastructure charges	$0	$1,942	$30,000
Local government regulations	$1,500	$2,580	$4,950
Compliance costs Stamp duty	$0 $300	$0 $750	$6,600 $1,688
Total charges	$1,800	$5,272	$43,238
Median house price	$93,063	$144,475	$516,288
Proportion of charges to house price	1.9%	3.6%	8.4%

(a) Section 94 contributions are charges paid by developers to fund public amenities and services required as a result of the development.

Source: HIA Economics Group unpublished, 2008.

Table A3.6: Component house and land package costs, Sydney, Melbourne, Brisbane, Adelaide and Perth, 1992, 2002, 2004
Sydney	1992		2002		2004
Sydney	($)	(% of land cost)	($)	(% of land cost)	($)	(% of land cost)
Acquisition	$30035	38	$73700	46	$106500	50
Direct servicing	$13068	17	$25250	16	$34,190	17
External and indirect authority requirements	$1,490	2	$ 2000	1	$3,600	1
Government taxes and charges	$19348	25	$ 31750	20	$19,730	16
Financial and management costs	$10,725	14	$18800	12	$7,200	11
Selling costs	$4,236	5	$7880	5	$8,560	5
Total development costs	$78902	100	$159380	100	$123,280	100
Net selling price	$83000		$191256		$133,000
GST (remit ATO)	$0		$11795		$13,300
	($)	(% of package)	($)	(% of package)	($)	(% of package)
Gross land price	$83,000	54	$203,051	60	$275,677	55
House price	$72,000	46	$135,000	40	$226,875	45
House and land package	$155,000	100	$338,051	100	$502,552	100


Melbourne	1992		2002			2004
Melbourne	($)	(% of land cost)	($)	(% of land cost)		($)		(% of land cost)
Acquisition	$8,350	23	$24,040		29	$50,000	41
Direct servicing	$7,625	21	$28,720		35	$34,190	28
External and indirect authority requirements	$1,490	4	$1,640		2	$3,600	3
Government taxes and charges	$9,242	26	$16,535		20	$19,730	16
Financial and management costs	$10,725	30	$4,400		5	$7,200	6
Selling costs	$4,236	12	$7,450		9	$8,560	7
Total development costs	$35,855	100	$82,785		100	$123,280	100
Net selling price	$40,000		$92,000			$133,000
GST (remit ATO)	$0		$9,200			$13,300
	($)	(% of package)	($)		(% of package)	($)	(% of package)
Gross land price	$40,000	38	$101,200		37	$125,750	42
House price	$64,500	62	$175,000		63	$172,519	58
House and land package	$104,500	100	$276,200		100	$298,269	100


Brisbane	1992		2002			2004
Brisbane	($)	(% of land cost)	($)	(% of land cost)		($)		(% of land cost)
Acquisition	$18,052	34	$37,700		43	$84,750	55
Direct servicing	$13,048	24	$22,845		26	$33,675	22
External and indirect authority requirements	$3,466	6	$2,300		3	$0	0
Government taxes and charges	$5,938	11	$11,600		13	$17,650	11
Financial and management costs	$9,100	17	$7,250		8	$8,050	5
Selling costs	$3,960	7	$5,450		6	$10,100	7
Total development costs	$53,564	100	$87,145		100	$154,225	100
Net selling price	$65,000		$107,500			$188,523
GST (remitted to ATO)	$0		$6,800			$11,477
	($)	(% of package)	($)		(% of package)	($)	(% of package)
Gross land price	$65,000	51	$114,300		49	$200,000	51
House price	$61,500	49	$120,000		51	$190,000	49
House and land package	$126,500	100	$234,300		100	$390,000	100


Adelaide		1992		2002			2004
Adelaide		($)	(% of land cost)	($)	(% of land cost)		($)		(% of land cost)
Acquisition	$9,530		32	$15,150		36	n/a	n/a
Direct servicing	$9,780		32	$17,460		42	n/a	n/a
External and indirect authority requirements	$2,464		8	$900		2	n/a	n/a
Government taxes and charges	$1,470		5	$3,000		7	n/a	n/a
Financial and management costs	$4,533		15	$2,550		6	n/a	n/a
Selling costs	$2,395		8	$2,925		7	n/a	n/a
Total development costs	$30,172		100	$41,985		100	n/a	n/a
Net selling price	$33,000			$55,000			n/a
GST(remit ATO)	$0			$2,600			n/a
	($)		(% of package)	($)		(% of package)	($)	(% of package)
Gross land price	$33,000		40	$57,600		32	n/a	n/a
House price	$49,700		60	$120,000		68	n/a	n/a
House and land package	$82,700		100	$177,600		100	n/a	n/a


Perth	1992		2002			2004
Perth	($)	(% of land cost)	($)	(% of land cost)		($)		(% of land cost)
Acquisition	$10,050	29	$10,700		20	$10,700	11
Direct servicing	$7,256	21	$20,790		39	$45,724	46
External and indirect authority requirements	$2,735	8	$0		0	$5,976	6
Government taxes and charges	$6,780	20	$9,070		17	$20,800	21
Financial and management costs	$5,588	16	$3,500		7	$7,000	7
Selling costs	$1,690	5	$9,770		18	$9,400	9
Total development costs	$34,099	100	$53,830		100	$99,600	100
Net selling price	$37,000		$64,600			$113,175
GST (remitted to ATO)	$0		$3,400			$12,575
	($)	(% of package)	($)		(% of package)	($)	(% of package)
Gross land price	$37,000	47	$68,000		42	$125,750	42
House price	$41,700	53	$95,399		58	$172,519	58
House and land package	$78,700	100	$163,399		100	$298,269	100

Source: ACIL Tasman, Landcost: The impact of land costs on housing affordability, 3rd edn, report prepared for the Urban Development Institute of Australia, May 2006.

Table A3.7: Average cost per square metre of new work for detached houses ($), by region, 1995–96 to 2007–08
	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008
							($)
Sydney	527	514	505	516	540	595	641	655	702	776	828	881	917
Balance of NSW	533	526	524	537	551	592	629	647	705	765	792	828	860
Total NSW	530	520	514	526	545	594	635	651	704	769	806	851	885
Melbourne	504	513	528	553	596	657	690	733	762	800	828	894	933
Balance of Vic.	504	508	528	552	581	629	671	714	756	779	820	854	888
Total Vic.	504	512	528	553	592	649	684	727	760	793	825	881	920
Brisbane	459	460	461	469	492	551	572	612	705	780	836	870	947
Balance of Qld	493	506	521	529	539	583	622	675	755	835	884	944	1,014
Total Qld	478	484	492	502	517	566	599	644	732	812	863	915	987
Adelaide	414	411	422	440	472	521	552	590	658	756	842	841	916
Balance of SA	396	415	429	433	448	496	525	578	662	730	793	867	905
Total SA	407	413	425	437	463	512	542	586	660	742	817	854	911
Perth	424	437	450	466	496	521	528	561	579	645	741	891	961
Balance of WA	433	478	490	495	522	579	583	607	641	703	813	978	1,092
Total WA	427	448	460	474	504	536	542	573	596	661	762	919	1,006
Total Tas.	469	477	473	498	516	561	620	644	714	841	857	953	955
Total NT	558	631	686	737	679	760	690	762	772	886	968	1,084	1,153
Total ACT	640	628	615	638	610	680	669	682	827	884	881	983	1,023
Total Australia	483	489	500	516	543	593	622	657	711	767	820	895	950

Table A3.7: Average cost per square metre of new work for total semi-detached dwellings ($), by region, 1995–96 to 2007–08 (continued)
	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008
							($)
Sydney	674	652	610	681	618	669	761	689	809	901	908	1,032	1,173
Balance of NSW	561	564	580	610	608	603	654	734	767	850	950	1,034	1,075
Total NSW	632	618	598	656	614	648	709	705	793	882	925	1,032	1,129
Melbourne	624	534	582	643	694	726	821	906	949	906	982	1,117	1,161
Balance of Vic.	771	547	662	613	714	792	847	893	963	958	1,056	1,132	1,121
Total Vic.	637	536	588	641	695	731	823	905	951	915	993	1,119	1,155
Brisbane	589	537	577	646	672	690	736	749	952	982	1,116	1,146	1,385
Balance of Qld	557	527	583	558	602	634	730	825	943	994	1,035	1,162	1,307
Total Qld	571	532	580	603	628	660	732	803	947	988	1,069	1,155	1,344
Adelaide	486	439	512	648	555	589	700	587	770	936	1,210	1,238	1,402
Balance of SA	516	556	506	585	488	593	673	714	877	897	980	1,076	1,216
Total SA	495	485	509	627	535	589	694	608	801	915	1,135	1,182	1,342
Perth	523	558	534	604	630	618	646	692	773	827	1,111	1,270	1,186
Balance of WA	627	702	720	613	727	746	708	767	847	893	1,439	1,514	1,354
Total WA	542	583	573	606	649	641	662	714	806	840	1,217	1,340	1,238
Total Tas.	613	664	615	582	751	714	695	885	1,215	1,144	1,253	1,042	1,080
Total NT	723	808	652	665	732	748	651	853	789	855	930	1,308	1,322
Total ACT	699	776	577	757	773	889	739	932	894	1,441	1,938	2,691	2,115
Total Australia	590	566	585	631	654	686	760	803	901	922	1,037	1,144	1,231

Table A3.7: Average cost per square metre of new work for total flats, units and apartments ($), by region, 1995–96 to 2007–08 (continued)
	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008
							($)
Sydney	899	882	1,245	972	1,081	1,213	965	880	1,372	1,369	1,550	1,558	1,890
Balance of NSW	762	667	720	824	905	828	874	1,066	1,375	1,063	1,109	1,406	1,345
Total NSW	864	848	1,118	943	1,057	1,169	946	918	1,372	1,304	1,394	1,529	1,757
Melbourne	1,223	966	975	1,206	1,153	1,729	2,497	1,563	1,774	1,582	1,733	2,041	2,149
Balance of Vic.	594	649	849	722	877	719	1,934	1,183	1,417	1,270	1,622	2,761	3,224
Total Vic.	1,182	958	972	1,188	1,146	1,659	2,484	1,550	1,756	1,572	1,724	2,057	2,203
Brisbane	602	879	954	749	852	1,006	1,241	1,300	1,291	1,632	1,763	1,775	2,313
Balance of Qld	899	767	891	716	911	959	1,132	1,366	1,395	1,696	1,754	1,839	1,808
Total Qld	760	820	917	729	881	983	1,190	1,333	1,338	1,661	1,759	1,810	2,026
Adelaide		414		1,190			789	1,019	1,038	755	1,057	1,114	1,376
Balance of SA	541				608	561	650	565	709	5,000	1,011	2,748	1,303
Total SA	541	414		1,190	608	561	663	770	870	1,524	1,052	1,821	1,355
Perth	808	821	797	1,267	1,137	1,105	1,065	1,260	1,120	1,950	1,567	2,390	3,907
Balance of WA		788	813	402	486	1,290	652	810	1,082	1,508	1,603	3,539	1,975
Total WA	808	821	799	1,235	1,047	1,107	1,035	1,062	1,113	1,882	1,570	2,476	3,445
Total Tas.	712	945	584	581	1,035	920	1,349	1,454	1,619	1,003		1,096	951
Total NT	532	792	741	863	867	690	591	815	1,637	782	1,426	1,238	1,666
Total ACT	729	778		778	932	990	1,037	772	1,314	2,394	1,851	1,713	1,986
Total Australia	833	851	978	958	997	1,193	1,439	1,320	1,409	1,580	1,653	1,872	2,141

Source: Australian Bureau of Statistics, Building Approvals (data available on request).

4. Demand–supply gap data

Table A4.1: Estimated dwelling need of rough sleepers, 2006
Allocation	2006 Census
Single—1 person per dwelling	5,449
Couple—2 persons per dwelling	1,436
Family with children—1 family per dwelling	1,705
Group household—1 group per dwelling	184
Total dwellings needed	8,774

Source: Chamberlain C and McKenzie D, Australian Census Analytic Program: Counting the Homeless, 2006, cat. no. 2050.0. ABS, Canberra, 2008.

Table A4.2: Occupied and unoccupied dwellings, 1991, 1996, 2001 and 2006
Year	Occupied dwellings	Unoccupied dwellings	Total dwellings	Unoccupied as a percentage of total dwellings
	Number of private dwellings			%
1991	5,852,518	597,582	6,450,100	9.26
1996	6,496,072	679,165	7,175,237	9.47
2001	7,072,202	717,877	7,790,079	9.22
2006	7,596,182	830,378	8,426,560	9.85

10-year period from 1996 to 2006:
Increase in total dwellings from 1996 to 2006			1,251,322
Per cent increase in total dwellings from 1996 to 2006			17.43%
Annual growth in stock from 1996 to 2006			125,132

Source: Australian Bureau of Statistics, 2001 Census Time Series Profile, Australia, ‘Table 18: Dwelling structure’, cat. no. 2003.0, ABS, Canberra, 2003; ABS, 2006 Census Tables, ‘Dwelling structure by occupied/unoccupied dwellings’, cat. no. 2068.0, ABS, Canberra, 2007.

Table A4.3: Projection of demand-supply gap using medium supply and medium household growth projections, 2008 to 2028
Year	Medium supply projection	Medium household growth projection	Gap between underlying demand and dwelling construction	Cumulative gap Including initial gap due to homelessness and vacancy
	Number of dwellings
2008	129,000	149,000	n.a.	85,000
2009	129,000	152,000	23,000	108,000
2010	130,000	153,000	23,000	131,000
2011	131,000	155,000	24,000	155,000
2012	131,000	155,000	24,000	179,000
2013	132,000	156,000	24,000	203,000
2014	133,000	156,000	23,000	226,000
2015	133,000	157,000	24,000	250,000
2016	134,000	157,000	23,000	273,000
2017	135,000	157,000	22,000	295,000
2018	135,000	156,000	21,000	316,000
2019	136,000	157,000	21,000	337,000
2020	137,000	156,000	19,000	356,000
2021	137,000	156,000	19,000	375,000
2022	138,000	155,000	17,000	392,000
2023	139,000	154,000	15,000	407,000
2024	139,000	152,000	13,000	420,000
2025	140,000	149,000	9,000	429,000
2026	141,000	145,000	4,000	433,000
2027	142,000	143,000	1,000	434,000
2028	142,000	139,000	-3,000	431,000

Source: National Housing Supply Council estimates based on McDonald–Temple medium household growth scenario, 2008; NHSC estimates of net dwelling completions (adjusted for demolitions); NHSC estimates of the initial gap between dwelling supply and demand.

5. Affordability data

Table A5.1: HIA trade contractor price index, by selected capital cities and balances of states, 2003–04 to 2007–08
	2003–04	2004–05	2005–06	2006–07	2007–08
Sydney	124	126	125	129	137
Balance of NSW	106	115	113	116	122
Melbourne	114	117	115	120	125
Balance of Vic.	106	99	100	106	111
Brisbane	112	126	122	125	134
Balance of Qld	109	114	116	124	130
Adelaide	115	116	121	113	120
Balance of SA	102	108	110	110	114
Perth	108	117	121	131	142
Balance of WA	104	132	136	135	139
Average	112	118	120	125	131

Notes:

Data are the average of available data from each financial year. Data are missing for December and March quarters, 2004, and for June quarter, 2008.

The index was set at 100 for September quarter, 2002.

Source: Housing Industry Association unpublished, 2008.

Table A5.2: Social housing dwellings, Australia, 1996 to 2008
	Public rental housing	Community housing	State owned and managed Indigenous housing	Crisis accommodation program	Total
1996 (a)	372,134	13,741	11,119	3,240	400,234
1997 (a)	369,340	16,515	11,820	3,520	401,195
1998 (a)	361,790	21,958	11,855	4,136	399,739
1999 (a)	362,447	23,756	12,009	5,601	403,813
2000 (a)	362,967	24,316	12,162	5,507	404,952
2001 (a)	359,322	25,937	12,343	5,876	403,478
2002 (a)	354,124	27,178	12,579	6,408	400,289
2003 (b)	348,012	29,367	12,563	6,820	396,762
2004 (b)	345,335	26,753	12,725	7,129	391,942
2005 (b)	343,301	29,279	12,860	7,049	392,489
2006 (b)	341,378	29,693	12,893	7,346	391,310
2007 (c)	339,771	34,672	13,098	7,518	395,059
2008 (d)	338,000	35,000	13,000	8,000	393,000

Note: The number of dwellings is at 30 June.

(a) Public rental housing dwelling numbers derived from Australia’s Welfare 2003; other dwelling numbers derived from Housing Assistance Act 1996 annual reports.

(b) All dwelling numbers derived from Australia’s Welfare 2007.

(d) All dwelling numbers derived from estimates and subject to change.

Source: Australian Institute of Health and Welfare, Australia’s Welfare 2003, cat. no. AUS 41, AIHW, Canberra, 2003; AIHW, Australia’s Welfare 2007, cat. no. AUS 93, AIHW, Canberra, 2007; AIHW, Public Rental Housing 2006–07: Commonwealth State Housing Agreement national data report, cat. no. HOU 170, AIHW, Canberra, 2008; AIHW, State owned and managed Indigenous housing 2006–07: Commonwealth State Housing Agreement national data report, cat. no. HOU 171, AIHW, Canberra, 2008; AIHW, Community Housing 2006–07: Commonwealth State Housing Agreement national data report, cat. no. HOU 172, AIHW, Canberra, 2008; AIHW, Crisis Accommodation Program 2006–07: Commonwealth State Housing Agreement national data report, cat. no. HOU 174, AIHW, Canberra, 2008; AIHW, preliminary estimates for dwellings at June 2008, personal communication, October 2008; Department of Family and Community Services, Housing Assistance Act 1996 Annual Report 1996–1997, FACS, Canberra, 1999; FACS, Housing Assistance Act 1996 Annual Report 1997–1998, FACS, Canberra, 2000; FACS, Housing Assistance Act 1996 Annual Report 1998–1999, FACS, Canberra, 2001; FACS, Housing Assistance Act 1996 Annual Report 1999–2000, FACS, Canberra, 2002; FACS, Housing Assistance Act 1996 Annual Report 2000–2001, FACS, Canberra, 2003; FACS, Housing Assistance Act 1996 Annual Report 2001–2002, FACS, Canberra, 2003.

Appendix 3: Data sources and methods

The main types of data needed for this report cover the areas identified in the Council’s Terms of Reference (Appendix 1) relating to:

the provision of forecasts and analysis on the adequacy 
    of land supply and construction activity to meet demand and improve affordability 
    over a 20-year forecast period. 

This appendix provides information on the data used and the methodology employed in producing the estimates and projections presented in the report. The two major subjects covered are:

estimates and projections of underlying demand
estimates and projections of housing and land supply.

The projections of underlying demand (as with any projection) are not predictions or forecasts; rather, they provide an assessment of what would happen to Australia’s housing in terms of demand for dwellings if the assumed levels of the components of household change (births, deaths, migration and household formation) were to be realised over the next 20 years. Similarly, the projections of construction activity are based on the assumption that existing trends in dwelling completions will continue.

The major data sources used in the study are:

2006 ABS Census data on occupied and unoccupied dwellings
ABS population projection data
ABS construction and dwelling activity data
administrative data from housing and planning agencies
industry-provided data on costs, affordability and dwelling characteristics.

There are a number of factors that are particularly important to bear in mind when interpreting the results. Areas where the assumptions used are particularly sensitive in terms of their impact on the final outputs are:

the exclusion of unoccupied dwellings in examining gaps
the inclusion of demolition adjustment estimates
the sensitivity of the population demand projections as shown by the changes in demand between the three scenarios presented
the sensitivity of the land supply and dwelling construction projections used
the effect of externalities, such as new policy or program outlays and structural change to the social and economic environment since 2006, as these have not been incorporated into the assumptions.

In some sections of the report, the Council was unable to find consistent national data. These issues will be addressed in future reports. In key areas where there was no consistent national data, the Council has produced estimates based on available information, which may affect the quality of results.

In several other sections where information was not generally available, the Council was able to utilise data provided by individual Council members to enhance reporting and analyses in particular areas of interest.

Demand projections

The Council focused on underlying demand for its long-term outlook. The Council’s 20-year outlook of housing demand was based on projections by Professor Peter McDonald and Dr Jeromey Temple, using a model that estimates the probable formation of different household types and incorporates various assumptions on migration and household transition. Low-, medium- and high-growth scenarios were developed using different assumptions about overseas migration and interstate migration.

The three underlying demand scenarios in the report provide low, medium and high forecasts of household growth as follows:

The low household growth scenario assumes that age- and sex-specific net migration rates (overseas and interstate) for each region as observed in the period 2001–06 are maintained at a constant proportion of the population, with net overseas migration increasing from around 120,000 in 2008 to around 160,000 in 2028.
The medium household growth scenario sets net overseas migration at a constant rate of 180,000 a year from 2008 onwards, with shares to States and Territories of overseas migration and rates of interstate migration equated to those used by the most recent ABS medium projection.¹
The high household growth scenario sets net overseas migration at a constant rate of 230,000 a year from 2008 onwards, with shares to States and Territories as per the medium household growth scenario.

More detailed discussions of the methodology are contained in Chapter 2 and the McDonald–Temple report, Projections of Housing Demand in Australia, 2006–2021, which is available on the National Housing Supply Council web page <http://www.fahcsia.gov.au/facsinternet.nsf/housing/nhsc.htm>.

Related State and Territory projections

The demand projections used in the report were compiled using national data and were primarily designed to provide a national picture of demand. While these data can be used to produce State and Territory estimates, they may differ from similar projections undertaken by the State and Territory planning agencies. These planning agencies apply local knowledge and information to produce projections at the jurisdictional and local council levels. Table A1 provides references for further information.

Table A1: Information on relevant State and Territory government demand projections
NSW	Department of Planning, 2008, New South Wales Household and Dwelling Projections, 2006–2036: 2008 Release, Department of Planning, Sydney, 2008, <www.planning.nsw.gov.au>
Vic	Department of Planning and Community Development, Victoria in Future 2008 – Population Projections, DPCD, 2008, <www.dpcd.vic.gov.au>
Qld	Department of Infrastructure and Planning, Queensland’s future population, 2008 edition, 2008, <www.dip.qld.gov.au/population-forecasting/index.php>
SA	Planning SA, Population projections for South Australia (2001–31) and the State’s Statistical Divisions (2001–21), Planning SA, 2007, <www.planning.sa.gov.au>
WA	Western Australian Planning Commission, Western Australia Tomorrow, WAPC, Perth, 2003, <www.wapc.wa.gov.au/Publications/723.aspx>
ACT	Chief Minister’s Department, Australian Capital Territory population projections: 2002–2032 and beyond, Chief Minister’s Department, Canberra, 2003

Supply projections

In preparing its supply projections, the Council adopted different approaches for dwelling supply and land supply. For dwellings, estimates were based on the trend in dwelling production since 1980, while for land supply, estimates were derived from information on capital city land supply for residential development (Figure A1).

Figure A1: Summary of supply-based estimates and projections

Figure A1: Summary of supply-based estimates and projections

As the Council establishes more sophisticated modelling capacity, future reports will use a range of assumptions related to construction capacity, market factors and productivity to present supply projections.

Estimates based on dwelling completions

New supply (gross)

The supply projections of construction activity are based on the trend line for ABS completions data over the period 1 July 1980 to 31 December 2007, extrapolated to the projection years presented.

The medium supply projections are based on the trend in building completions from 1980 to 2007. The trend was projected for each State and Territory. The completions data were adjusted for the estimated demolition rate in each jurisdiction based on the difference in the increases in dwellings between the Census of 2001 and 2006 compared with the total new dwelling completions over that period.

A low supply trend was estimated using the lowest level of completions in each State and Territory as identified using a moving average annual calculation from the ABS quarterly data from 1980 to 2007. This low level of completions was expressed as a proportion of the average completion rate for the jurisdiction and applied to its trend projection. The data were adjusted for the estimated demolition rate. The low supply projection reflects a situation where construction of private dwellings is severely constrained in a ‘realistic’ way (this level of completions has happened in the last 27 years).

A high supply trend was estimated using the highest level of completions in each State and Territory as identified using a moving average annual calculation from the ABS quarterly data from 1980 to 2007. This high level of completions was expressed as a proportion of the average completion rate for the jurisdiction and applied to its trend projection. The data were adjusted for the estimated demolition rate. The high supply projection reflects a situation where construction of private dwellings is significantly above average and represents a high level of output that is commensurate with what has actually happened in the last 27 years. The sustainability of such an increase over time would probably require structural change in productivity and/or expansion in capital investment.

New supply (net) – adjusting supply estimates for demolition loss

To adjust the dwelling supply estimates and projections for loss in existing occupied stock due to demolitions, a proxy demolition rate was calculated for Australia and each State and Territory based on the difference in the total dwelling counts (occupied and< unoccupied) between the 2001 and 2006 Censuses and the number of completions reported for the same period (see Table A2). This approach can only be considered an interim measure until a more sophisticated methodology for capturing demolition rates is developed.

Table A2: Derivation of a proxy demolition rate to adjust completions data for demolition loss, 2006
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT	Australia
Dwelling completions (number) (a)
2001–06	201,139	206,091	180,559	47,174	94,731	10,897	5,044	11,276	756,914
Number of dwellings (census point in time) (b)
2001	2,571,540	1,914,211	1,482,912	645,944	772,778	208,046	71,976	121,752	7,790,079
2006	2,728,721	2,085,113	1,660,748	679,662	849,006	216,746	74,193	131,375	8,426,559
Difference in number of dwellings between 2001 and 2006 censuses
	157,181	170,902	177,836	33,718	76,228	8,700	2,217	9,623	636,480
Five-year proxy number of demolitions
2001–06	43,958	35,189	2,723	13,456	18,503	2,197	2,827	1,653	120,434
One-year proxy number of demolitions
2001–06	8,792	7,038	545	2,691	3,701	439	565	331	24,087
Proxy demolitions as a proportion of completions (average over five years – 2001–06)
	22%	17%	2%	29%	20%	20%	56%	15%	16%
Adjustment factor used to adjust total completions data for demolitions
	78%	83%	98%	71%	80%	80%	44%	85%	84%

Sources:

(a) Australian Bureau of Statistics, Building Activity, Australia, June 2008, cat. no. 8752.0, ABS, Canberra, 2008.

(b) Australian Bureau of Statistics, 2006 Census Tables, Australia, ‘Dwelling Structure by Occupied/Unoccupied Dwellings, Time Series Statistic (1996, 2001, 2006 Census Years)’, cat. no. 2068.0, ABS, Canberra, 2007.

Estimates of land supply

The Council has attempted to compile national data from State and Territory planning agencies for this first report but has been unable to complete a comprehensive national picture due to a range of data-related issues, discussed below.

The data on land supply vary between States and Territories in terms of the coverage of the data and how it is defined. While each jurisdiction produces information on the amount of land supply at various stages in the supply pipeline, there are underlying differences in the way the data are produced that need to be resolved. For example, different jurisdictions report the estimates of available land in terms of hectares available, dwelling yield or total years of potential supply, and while some jurisdictions measure the total amount available, others measure new supply since the last reporting period. As a result of the problems in comparability in the initial data, the Council has attempted to estimate national land supply data based on a restricted range of data from some jurisdictions. These data provide rough estimates only, and a major task for the second report will be to develop more robust measures.

To obtain estimates for this report, information was gathered for capital cities in five jurisdictions (Victoria, Queensland, South Australia, Northern Territory and Australian Capital Territory) on the potential dwelling yield for:

broadhectare land (greenfield land) in terms of urban density land and low-density land
redevelopment areas in terms of major redevelopment (50+ net additional dwellings) and minor redevelopment (10–50 net additional dwellings).

These data were broken up into land to be released over the following time periods:

within the next two years
more than two years but less than five
more than five years but less than 10
more than 10 years.

While estimates have been produced across these time periods, the Council stresses that projections beyond two years are speculative given uncertainty about the actual conversion of land to marketable lots as well as potential dwelling yield. In addition, the lack of data on redevelopment areas with an individual dwelling yield of less than 10 net additional dwellings is a major exclusion that needs to be borne in mind in interpreting these data.

Table A3 shows the data from the capital cities of the five jurisdictions and the estimated data for all capital cities in Australia based on prorating these data by a factor of 1.558, representing the ratio of dwelling approvals for all jurisdictions to the five jurisdictions’ approvals.

Table A3: Estimates of land supply by broadhectare and redevelopment, five jurisdictions and all capital cities, 2008
	<2 years	2–5 years	5–10 years	>10 years	Total
	Estimated distribution of land supply for five jurisdictions’ capital cities (a)
Broadhectare land (greenfield land)
Urban density land	84,000	142,000	218,000	277,000	721,000
Low-density land	3,000	9,000	13,000	26,000	51,000
Redevelopment areas
Major redevelopment (50+ net additional dwellings)	128,000	128,000	87,000	3,000	345,000
Minor redevelopment (10–50 net additional dwellings)	14,000	13,000	6,000	1,000	34,000
Total dwelling yield	229,000	291,000	323,000	307,000	1,152,000
	Estimated distribution of land supply for all Australian capital cities
Broadhectare land (greenfield land)
Urban density land	131,000	221,000	339,000	432,000	1,123,000
Low-density land	5,000	13,000	20,000	40,000	80,000
Subtotal	136,000	234,000	359,000	472,000	1,203,000
Redevelopment areas
Major redevelopment (50+ net additional dwellings)	199,000	199,000	136,000	4,000	538,000
Minor redevelopment (10–50 net additional dwellings)	22,000	21,000	9,000	2,000	53,000
Subtotal	221,000	220,000	145,000	6,000	591,000
Total dwelling yield	357,000	454,000	504,000	478,000	1,794,000

(a) Based on capital city information on land supply for Victoria, Queensland, South Australia, Northern Territory and Australian Capital Territory.

Source: NHSC estimates.

Related state and territory dwelling and land supply projections

The dwelling supply projections used in this report were compiled using national data and were primarily designed to provide a national picture of dwelling supply. While these data are able to produce state and territory estimates, it is important to acknowledge the limitations of the methodology used.

The methodology used in this report to provide a national estimate of potential land supply was not able to adequately take into account the levels of planning activity in all jurisdictions for a variety of reasons relating to comparability and availability of data. To provide a jurisdiction-specific understanding of land supply, readers are advised to examine the relevant planning agency website. Table A4 provides references to relevant reports and websites containing State land supply information.

Table A4: Information on relevant State and Territory government supply projections
NSW	Department of Planning, Metropolitan Development Program 2007 Update, Department of Planning, Sydney, 2007, <www.planning.nsw.gov.au>
Vic	Department of Planning and Community Development, Urban Development Program Annual Report 2007, DPCD, Melbourne, 2008, <www.dpcd.vic.gov.au/web14/dvc/dvcmain.nsf>
Qld	Department of Infrastructure and Planning, Queensland residential land and dwelling activity monitor, 2008, <www.dip.qld.gov.au/land/residental-land-development-trends.html>
SA	Department of Planning and Local Government, Planning Strategy for Metropolitan Adelaide (December 2007), 2007, <www.planning.sa.gov.au>
WA	Department of Planning and Infrastructure, Land Development Program – State Lot Activity (June Quarter 2008), Western Australian Planning Commission, Perth, 2008, <www.dpi.wa.gov.au/index.asp>
ACT	Chief Minister’s Department, Indicative Residential Land Release Program 2008–09 to 2012–13, April 2008, <www.cmd.act.gov.au>

Major data limitations

The major data limitations identified in producing this first report are outlined in Table A5.

Table A5: Major data limitations identified in producing the first report
Data area
Treatment of unoccupied dwellings
Issue: Unoccupied dwellings, while being a significant component of dwelling stock, are not included when examining the supply of dwellings required to meet demand as there is little information on their status.
Approach used: The Council adopted the generally accepted approach of omitting these dwellings in analysis of the demand–supply gap but noted this omission as a major qualifier on the report estimates and an area requiring urgent work for future reporting.
Demand projections
Issue: Projections relate only to underlying demand.
Approach used: The projections used in the report do not attempt to allow for non-demographic factors that contribute to effective demand such as those discussed in Box 2.4 in Chapter 2. The Council will examine these issues in its second report.
Dwelling supply data
Issue: There are no official data on the annual number of demolitions and how this impacts on supply data.
Approach used: The Council’s methodology was based on estimates using census dwelling counts and dwelling completions data.
Land supply data
Issue: There are no national data on the land supply pipeline.
Approach used: The Council’s estimate was produced using data on five jurisdictions’ capital cities prorated to reflect a national estimate. This has been identified as an area of priority for future work
Demand–supply gap definition
Issue: There is no standard methodology for measuring the gap between supply and demand.
Approach: The methodology described in Chapter 4 is only one approach as to how a gap may be calculated. The Council will refine the measurement for future reports.
Housing submarkets and specific submarket gaps
Issue: Submarket issues such as meeting Indigenous housing demand, the supply of modified housing for people with disabilities, and addressing location-specific need are not examined in this first report.
Approach: The Council will examine these issues in its second report.

These issues impact on the robustness and reliability of the methodology and estimates in the report. The development of data for future reports will allow for more accurate estimates and a more reliable basis on which projections can be made.

Appendix 4: Housing hotspots

Housing hotspot: Auburn, Western Sydney

General

Auburn has a growing population, with high housing demand and high housing need. Redevelopment of large industrial sites and redevelopment in the town centres (urban infill) is resulting in an increase of density and population. Auburn Local Government Area includes Homebush, the site of the 2000 Sydney Olympics. The impact of development from the Sydney Olympics was reflected in changes to house prices and rents.ⁱ

Construction activity in Auburn is expected to remain high in the near term, with major projects such as the Auburn health services development and the development of Lidcombe Town Centre. Significant investment is planned for both road and rail network development throughout Western Sydney.ⁱⁱ

Auburn Local Government Area is part of the West Central Subregion, a key economic driver of the New South Wales Government’s Greater Metropolitan Region Strategy, launched in 2004. In that strategy, the metropolitan area of Sydney is arranged into 10 subregions combining local government areas with similar issues and challenges.

Housing supply issues

Land is limited. Urban infill through redevelopment of industrial sites is promising.

Residential building activity decreased significantly during the March quarter 2008, with falls in both the numbers of dwelling approvals and value of approvals.ⁱⁱⁱ

The number of building approvals in Auburn decreased by 59.4 per cent to 52 per cent in the March quarter 2008, due to falls in the number of new house approvals (down 15.2 per cent) and other dwellings (down 84.1 per cent). This represents an annual decline of 22.5 per cent from the level recorded in the March quarter 2007.^iv

During the period 2007–08, Auburn Local Government Area recorded an increase in median rent for a three-bedroom separate house of 22.6 per cent.^v

Some statistics:

Population: 87,616 (2001 – 77,228)^vi

No. of dwellings: 30,280 (2001 – 26,142)

Tenure: 29 per cent owned, 26.6 per cent purchased and 33.5 per cent rented

Type: 60.8 per cent separate houses (2001 – 68.0 per cent)

Median house price has increased by 5.0 per cent to $470,000 in the December quarter 2007.^vii

Median rents for all dwelling types increased strongly over the levels recorded 12 months previously. Median weekly rental prices for three-bedroom houses remained at $325 in the March quarter 2008.

Median monthly housing loan repayment was $1,680.

Housing affordability issues:

Limited availability of affordable rental housing for those in the lower to moderate income brackets.

Auburn has a significant number of households in receipt of Commonwealth Rent Assistance. Forty-five per cent are considered to be in housing stress. There is a need for more diversity of housing stock, particularly one-bedroom stock to accommodate single-person households and low income earners in the private rental market.

Rental increases in Auburn are considerably higher than those in other local suburbs like Parramatta and Holroyd. There is insufficient affordable rental housing to meet the needs of Auburn residents.

Between 2001 and 2007, the proportion of dwellings affordable for purchase to households at the 40th percentile of median income declined from 14 per cent to 2.2 per cent for households in Auburn. This makes it very difficult for lower income households to purchase housing in the area.

Based on the 2006 Census, 72 per cent of all low and moderate income purchasers in Auburn were in housing stress. This is an increase in 1,270 households from the 2001 Census. The difficulty of purchasing housing in Auburn for lower and moderate income earners shows the lack of affordable housing opportunities.

Public housing represents 3.8 per cent (1,177) of all housing in Auburn, which is a little lower than the average for the greater metropolitan region.^viii

Notes:

i. Centre on Housing Rights and Evictions, The impacts of the Sydney Olympic Games on housing rights: background paper, Centre on Housing Rights and Evictions, Geneva, 2007, p. 18.

ii. New South Wales Office of the Minister for Western Sydney, LGA profile Auburn, Parramatta, <www.gws.org.au/imagesDB/webPages/Auburn.pdf>.

iii. Auburn Council, Auburn economic profile, March quarter 2008, Auburn, <www.auburn.nsw.gov.au> / <www.auburn.nsw.gov.au/page.aspx?id=1348&>.

iv. Auburn Council, Auburn economic profile, March quarter 2008, Auburn, <www.auburn.nsw.gov.au>.

v. Housing New South Wales, Rent and sales report no. 85, Rent: September quarter 2008; Sales: June quarter p.3 http://www.housing.nsw.gov.au/About+Us/Reports+Plans+and+Papers/Rent+and+Sales+Reports/Latest+Issue/> 2008.

vi. Australian Bureau of Statistics, 2006 Census QuickStats: Auburn (State Electoral Division), ABS, Canberra, 25 October 2006.

vii. Auburn Council, Auburn economic profile, March quarter 2008, Auburn,<www.auburn.nsw.gov.au>.

viii. NSW Department of Housing, Information on Auburn housing market, Sydney <http://www.housing.nsw.gov.au/NR/rdonlyres/2AEA5A36-47DD-4C14-BDE7-1E0D3694999D/0/InformationonAuburnHousingMarket.doc>.

Housing hotspot: Ballina, New South Wales

General

Ballina on the New South Wales North Coast has experienced rapid growth in the past five years, predominantly in the over-50 age groups due to its appeal as a sea change destination. The Ballina Shire has an ageing population, with one in four people aged 60 or over.ⁱ

Gentrification of existing housing stock, limited supply due to high levels of holiday home ownership and environmental constraints are some of the factors underlying affordability issues in coastal sea change communities.ⁱⁱ

Housing supply issues:

There is a shortage of land available for housing in Ballina. Underlying demand is forecast to increase over the next two year period 2007–08 to 2008–09 due to strong population growth. The growth in demand generated mainly by new household formation. Over this same period, the Richmond-Tweed statistical division is expected to experience underlying demand of 3,377 new dwellings annually.ⁱⁱⁱ

Quarterly dwelling commencements for September 2008 were 455 (244 houses), up from 395 (225 houses) for the June 2008 quarter within the region which includes Richmond Valley-Casino, Kyogle, Byron and Ballina.^iv

Some statistics

Population: 40,000^v (Census 2006 – 38,461)^vi

Number of dwellings: 15,120 (2001 – 14,343)

Tenure: 40 per cent owned, 25 per cent being purchased, and 29 per cent rented

Type: 68 per cent separate houses

Ballina Shire’s median weekly household income in 2006 was $779, compared with the national average of $1,027.^vii

Ballina’s average house price increased from $178,000 in 2001 to $369,000 in 2006. The median house price at September 2008 was $385,000, down 4 per cent on the previous quarter; the median price for units was $285,000, down 15 per cent on the previous quarter.^viii

The median rent as at June 2008 for a three-bedroom house was $350 per week, and for a two-bedroom unit, $250 per week.^ix

The median mortgage payment was $1,290 per month.

Housing affordability issues

The Urban Development Institute of Australia noted that the level of affordability of home purchase decreased markedly in the period from 2001 to 2006 in the Ballina–Lismore–Tweed area.^x

The NSW Department of Housing provided the Senate Select Committee with statistics indicating that 79 per cent of very low income households in Ballina are currently under home purchaser stress. In the June quarter of 2007, the NSW Department of Housing estimated that there were no dwellings available for purchase for very low income households. A lack of diversity in the type of housing available also means that young adults seeking to live independently and older ‘empty nesters’ wanting to move to smaller accommodation are often forced to move away from their communities simply because of the lack of suitable accommodation. In response to these factors contributing to unaffordable housing, the Ballina City Council is encouraging ‘adaptable’ housing – that is, housing for which the initial design of the building allows the structure of the building to change over time with minor renovations.^xi

Many types of low-cost accommodation on the coast are under significant threat of redevelopment. It has been suggested that some council policies relating to caravan parks are examples of planning mechanisms that may act against the provision of affordable housing in these local government areas.^xii

Notes:

i. Ballina Shire Council, Homepage website, accessed 14 January 2009, <www.ballina.nsw.gov.au>.

ii. C Squires & N Gurran, ‘Planning for affordable housing in coastal sea change communities’, paper presented at AHURI National Housing Conference, Perth, 2005, p. 394. <www.nationalhousingconference.org.au/downloads/2005/Refereed/20Squires.pdf>.

iii. BIS Shrapnel, Regional residential building 2008, NSW, BIS Shrapnel, Sydney, April 2008, p. 29.

iv. BIS Shrapnel, Regional residential building 2008,Sydney, p. 31.

v. Ballina Shire Council, Homepage website, <www.ballina.nsw.gov.au>.

vi. Australian Bureau of Statistics, 2006 Census quickstats: Ballina (Local Government Area), ABS, Canberra.

vii. Senate Select Committee on Housing Affordability in Australia, A good house is hard to find: housing affordability in Australia, Senate Select Committee on Housing Affordability in Australia, Canberra, June 2008, p. 136.

viii. Australian Property Monitors, Home price guide, ‘Suburban snapshot – Ballina’, Australian Property Monitors, Sydney, <www.homepriceguide.com.au/snapshot/lga/index.cfm?action=view&lga=Ballina>.

ix. Housing NSW, Rent and sales report, issue 84, Housing NSW, Sydney, June 2008, <www.housing.nsw.gov.au>.

x. Urban Development Institute of Australia, An industry report into affordable home ownership in Australia, August 2007, Part 2, ‘UDIA state reports on housing affordability’, UDIA, Canberra, 2007, p. 26.

xi. Senate Select Committee on Housing Affordability in Australia, A good house is hard to find, p. 102.

xii. C Squires & N Gurran, ‘Planning for affordable housing in coastal sea change communities’, p. 394.

Housing hotspot: Mackay, Queensland

General

Mackay City has suffered a housing affordability crisis in recent years. Population growth in Mackay City peaked at 1,472 people in the year to June 2004, more than one-third higher than during the five years to June 2001 (909 people). Housing affordability in the Mackay region decreased over the five years to 2006–07. While the demand for new construction averaged 1,650 dwellings per year in the five years to 2006–07, only an average of 1,340 new dwelling commencements were recorded. The rapid expansion of the mining industry and increased deployment of military personnel to the area resulted in a 3.5 per cent growth in population between 2001 and 2006, exacerbating the housing shortage. Between 2001 and 2006, Mackay City ranked second in population growth in local government areas of regional Queensland.ⁱ

Concerns are being raised about whether the second mining boom will be over by the time a new development plan for the region is implemented.ⁱⁱ If strong population growth and low unemployment combined with high rental demand and lower stamp duty rates is maintained, regional Queensland property will remain attractive to both investors and owner-occupiers.ⁱⁱⁱ There has been solid growth in many coastal centres, with Mackay among the most outstanding performers.^iv

Housing supply issues

It has been suggested that government policies have served to limit land supply in favour of high-density housing.^v In Queensland, unlike in other States, local councils cannot seek developer contributions outside of the immediate area of development.^vi

Views have been expressed by industry that local development compromised by development delays and arbitrary processes. Issues include land availability for development and land affordability. The imposition of increased state and local government charges and compliance costs added on the development process for flood plain areas (which includes the whole of the Mackay CBD) make development prohibitively expensive and complicated in the area.^vii

Mackay City approved 1,010 residential lots in the year to March quarter 2008. This was a decrease of 45.2 per cent compared with the same period in 2007, when 1,843 lots were approved.^viii

Some statistics

Population: 2007 – 109,613^ix (2006 – 84,890)^x

(Note: The 2007 figure is based on Queensland’s estimated resident population for Mackay Regional Council (the entire Mackay region). The 2006 figure is the Australian Bureau of Statistics 2006 Census figure for the Mackay City local government area only).

No. of dwellings: 33,930^xi

Tenure: 31 per cent owned, 32.8 per cent being purchased, and 27.4 per cent rented^xii

Type: 80 per cent separate houses^xiii

Median house prices in Mackay increased from $142,250 in 2002 to as high as $395,000 in early 2008. Median prices at September 2008 were $350,000 for houses and $330,000 for units.^xiv

Median rent prices for three-bedroom houses in Mackay increased from $175 per week in 2002 to $360 per week as at March 2008.^xv The median rent for a two-bedroom unit was $270 per week as at June quarter 2008. The vacancy rate for rental property in Mackay is around 1.5 per cent, which is marginally lower than the average for Queensland.^xvi

The median mortgage payment is $1,300 per month^xvii,xviii.

Housing in Mackay is rated as ‘severely unaffordable’. Increased costs are passed on to the home buyer, which makes the region even more unaffordable for the average person.^xix

Based on ABS data on occupation, 46.7 per cent of the workforce (employed people aged 15 years and over) in Mackay were technicians and trade workers, machinery operators and drivers, and labourers; 11.5 per cent were professionals; and 12.2 per cent were managers. The median weekly individual income for people aged 15 years and over was $521, compared with $466 for the Australian population.^xx

Housing affordability issues

Serious constraints on affordability exist, with at least a $100,000 gap between what can be borrowed and the cost of a typical second-hand suburban detached house.^xxi The rapid expansion in mining has had a cumulative effect on population growth and housing pressures. Median rents have increased by as much as 106 per cent between 2002 and 2008.^xxii

There are limited housing options, with low vacancy rates for rental accommodation and limited social housing. Households on low and fixed incomes are being forced to relocate to areas with less expensive housing markets. There are difficulties in attracting and retaining workers in essential services and support industries.

Notes:

i. BIS Shrapnel, Regional residential building Queensland, 2008, BIS Shrapnel, Sydney April 2008, pp. 47–9.

ii. ‘Regional Qld in property boom’ [advertisement], The Mining Advocate, Currajong, February 2008, p. 9, <www.industryadvocate.com.au/editions/MTA_Feb_08.pdf>.

iii. Region’s need for speed’, Daily Mercury, Mackay, Qld, 16 August 2008 <http://www.dailymercury.com.au/story/2008/08/16/apn-regions-need-for/>.

iv. ‘Regional Qld in property boom’, p. 9.

v. R Walker, ‘Mackay key worker housing beyond reach’, Property Council of Australia, Queensland Division, media release, 4 June 2007, <www.propertyoz.com.au/qld/Articale/Resource.aspx?p=21&media=278>.

vi. Senate Select Committee on Housing Affordability in Australia, A good house is hard to find: housing affordability in Australia, Senate Select Committee on Housing Affordability in Australia, Canberra, June 2008, p. 87.

vii. Urban Development Industry Institute of Australia, Key issues for candidates seeking election to the Mackay Regional Council, position paper, Urban Development Institute of Australia, Mackay/Whitsunday Branch, Queensland, 12 February 2008, <www.udiaqld.com.au//?pageid=99>.

viii. Queensland Department of Infrastructure and Planning, Total residential land activity fact sheet, March quarter 2008, Mackay City (based on data as at October 2008), Queensland Department of Infrastructure and Planning, Brisbane, October 2008.

ix. Queensland Department of Infrastructure and Planning, Queensland population update, No 13, Queensland Department of Infrastructure and Planning, Brisbane, May 2008.

x. Australian Bureau of Statistics, 2006 Census QuickStats: Mackay (C) (Local Government Area), ABS, Canberra, 2007.

xi. Australian Bureau of Statistics 2006 Census QuickStats: Mackay (C) (Local Government Area), ABS, Canberra, 2007.

xii. Regional Economic Development Corporation, Mackay and Whitsunday, Regional Economic Development Corporation, Mackay, June 2008.

xiii. Regional Economic Development Corporation, Mackay and Whitsunday.

xiv. Australian Property Monitors, Home price Guide, ‘Suburb snapshot: Mackay’, Australian Property Monitors, Sydney, 2008, <www.homepriceguide.com.au/snapshot/price/index.cfm?action=view&source=apm>.

xv. Queensland Department of Housing, ‘Rental vacancy rate Queensland urban centres’, in Snapshot of the Australian housing market: rental and home ownership in Australian capital cities, Queensland’s regional centres, Bowen Basin and Mount Isa, Queensland Department of Housing, Brisbane, July 2008.

xvi. Queensland Residential Tenancies Authority, Medium weekly rents, June quarter 2008, Median Weekly Rents – North Queensland, Queensland Residential Tenancies Authority, Brisbane, 2008, <www.rta.quld.gov.au/median_weekly_rents.cfm>.

xvii. Queensland Department of Housing, Snapshot of the Australian housing market, rental and home ownership in Australian capital cities, Queensland’s regional centres, Bowen Basin and Mount Isa, Queensland Department of Housing, Brisbane, July 2008.

xviii. Australian Bureau of Statistics 2006 Census QuickStats: Mackay (C) (Local Government Area), ABS, Canberra, 2007.

xix. Urban Development Institute of Australia (Queensland), ‘Property industry hails amalgamation’, media release, Urban Development Institute of Australia, Brisbane, 12 February 2008.

xx. Australian Bureau of Statistics 2006 QuickStats: Mackay(C) (Local Government Area), ABS, Canberra, 2007.

xxi. Urban Development Institute of Australia, An industry report into affordable home ownership in Australia, August 2007, Part 2, ‘UDIA state reports on housing affordability’, UDIA, Canberra, 2007, p. 12.

xxii. Queensland Department of Housing, Snapshot of the Australian housing market, rental and home ownership in Australian capital cities, Queensland’s regional centres, Bowen Basin and Mount Isa, Queensland Department of Housing, Brisbane, July 2008.

Housing hotspot: Port Hedland, Western Australia

General

In 2008 Port Hedland in Western Australia was predicted to become the world’s largest tonnage port over the next decade as a result of a proposed expansion in the production of iron ore.ⁱ

2008 saw significant population pressures in the Pilbara caused by fly-in fly-out workers and short-term contract workers, which increased the resident population from 10 to 25 per cent.

Housing supply issues

Land supply in Port Hedland is severely limited, and planned land releases are affected by the impact of iron ore dust, coastal setbacks to protect from cyclonic storm surge and other environmental issues.ⁱⁱ Challenges in delivering new land is further complicated by difficulties in determining long-term town-based housing demand, high infrastructure costs, and dealing with shortages of construction workers and accommodation for those workers. The Western Australian Planning Commission is working with the Pilbara Industry’s Community Council to establish services and approve ‘land banks’ to deal with the uncertain timing of demand.ⁱⁱⁱ

In 2008, Port Hedland had a capital growth rate for property as at March 2008 of over 37 per cent according to Residex statistics.^iv

Some statistics

Population: The 2008 Western Australian Planning Commission’s projections estimated a population of 13,900 in 2008,^v rising to 14,800 in five years. The Australian Bureau of Statistics’ estimate is 13,060 (2006 Census). The Town of Port Hedland estimated the 2006 population to be of the order of 17,000. This was based on 5,219 residences at 2.7 people per dwelling, with an additional 3,000 people living in transient workforce accommodation.

No. of dwellings: 5,262^vi

Tenure: 10.1 per cent owned, 20.2 per cent being purchased, and 41 per cent rented

Type: 70.3 per cent separate houses

Median house prices in Port Hedland rose from $190,000 in June 2002 to $790,000 in June 2008, and in South Hedland they increased from $132,500 in June 2002 to $484,500 in June 2008.^vii

In September 2008 the median rent in Port Hedland is $1,050 per week. The vacancy rate was near 0 per cent, with new rental properties snapped up by renters before they are even advertised on the market.^viii

The median housing repayment per month is $1,083.

Based on ABS data on occupation, half of the workforce (employed people aged 15 years and over) in Port Hedland are technicians and trades workers, machinery operators and drivers, and labourers; 15 per cent are professionals; and nearly 10 per cent are managers.^ix The income range among these workers in Port Hedland is relatively large. The median individual gross income was about $1,000 a week, and 21 per cent of workers had a weekly income below $600, while 31 per cent had gross income over $1,600 a week, and about 19 per cent had gross income over $2,000 a week.

Housing affordability issues

There is very limited availability of affordable rental housing for those in the lower to moderate income brackets.

The shortage of housing is a particular problem for those with incomes too high to be eligible for state housing and too low to afford to rent or purchase privately. This impacts on young people and families who need access to affordable housing if they are to move into employment and positive pathways for their future in Port Hedland. The housing shortage and high rental prices also have an impact on local business. Unprecedented pressure in the housing market has seen skyrocketing sales prices within the town. This has resulted in home ownership being out of reach for most of the local community, particularly the Indigenous population.^x

Notes:

i. Town of Port Hedland in Partnership with BHP Billiton, Hedland’s future today: action blueprint, September, 2007, p. 5. <www.porthedland.wa.gov.au/CouncilInitiative/HedlandFutureToday>.

ii. Western Australian Planning Commission, Port Hedland, regional hotspots land supply update, draft, Western Australian Planning Commission, Perth, October 2008, p. 3.

iii. Western Australian Planning Commission, Port Hedland, p. 8.

iv. E Sowerbutts, ‘Boom times in Port Hedland, Western Australia’, International Properties Investment, 7 July 2008, accessed 18 November 2008, <www.internationalpropertyinvestment.com>.

v. Western Australian Planning Commission, Port Hedland, regional hotspots land supply update, p. 3.

vi. Australian Bureau of Statistics, 2006 Census QuickStats: Port Hedland (Local Government Area), ABS, Canberra.

vii. Real Estate Institute of Western Australia, REIWA market update, June quarter 2008, Real Estate Institute of Western Australia, Perth, June 2008.

viii. Real Estate Institute of Western Australia, Perth, pers. comm., with Jonathon Lang between July-September, 2008.

ix. Australian Bureau of Statistics, 2006 Census QuickStats: Port Hedland (Urban Centre/Locality), ABS, Canberra October, 2007.

x. Town of Port Hedland in Partnership with BHP Billiton, Hedland’s future today: action blueprint, September 2007, p. 19.

Appendix 5: Affordability measures

This appendix examines some of the different approaches used to measure the affordability of housing. In addition to the measures based on Australian Bureau of Statistics (ABS) censuses or surveys that use actual individual household incomes and housing costs, there are a number of imputed affordability measures that use a variety of data sources to examine households’ ability to access affordable ownership or rental housing.

It is important to note that ‘housing affordability’ and ‘housing sustainability’ are terms that are distinct from ‘affordable housing’:

Affordable housing is a term often used to refer specifically to housing that meets the size, facilities and location requirements of low income households (the lowest 40th percentile of the household income distribution) while also being within their financial means
In some approaches the focus is on the lowest 40 per cent of the income distribution with a mortgage or renting who were spending over 30 per cent of their income on housing – a commonly used benchmark for ‘housing stress’
Some analysts note that while housing affordability is a measure of the difficulty of getting into the housing market, housing stress is a measure of how much renters, purchasers and owners pay for their housing as a proportion of income
In addition, to determine the cost of housing from a wider community viewpoint, some argue that the level of housing sustainability over the longer term needs to be considered. Other costs related to affordability may need to be taken into account, including:
- travel time and the social and environmental costs related to accessing work and social and other engagements
- recurrent costs of operating and maintaining housing
- the overall cost of infrastructure provision by government and developers.

Housing affordability is typically measured by the ratio of household income to the income required to meet payments on a dwelling. The two most widely used and
publicised measures of housing affordability in Australia are:

the Real Estate Institute of Australia (REIA) Home Loan Affordability Index (HLAI) – the ratio of median family income (annualised) to average mortgage repayments (annualised)
Median family income is based on a historical benchmark from the ABS that is updated each quarter for each jurisdiction using changes in the ABS’s estimates of average weekly earnings. Average mortgage repayments are based on the average size of new loans in each quarter for each jurisdiction.
the Commonwealth Bank of Australia – Housing Industry Association First Home Buyer Housing Affordability Index (FHAI) – the ratio of average household disposable income Australia-wide to the ‘qualifying’ income required for a ‘typical’ first home loan in each jurisdiction.
Qualifying income is calculated on the assumption that repayments on a 25-year loan, for 80 per cent of the price of a ‘typical’ property purchased by a first home buyer, are equal to 30 per cent of household income. Up until 1988, the price of a typical dwelling purchased by first home buyers was directly estimated from loans approval data. Since that time, it has been based on the 1988 price, indexed by subsequent movements in the market-wide median price.

Although these two indicators are probably the best housing affordability indicators publicly available for Australia, like all the available indicators they have significant limitations in how well they describe the true housing affordability situation across the community. Simple affordability measures such as these based on ratios of housing costs to income do not give any indication of the non-housing outcomes that might be associated with housing stress. While the higher the ratio (of median house price to median annual disposable income) the harder it is to get into the housing market, the measure does not take into account interest rates; and a household does not usually devote its whole household income to paying off the house. In addition, these measures tend to focus on the average income for all households rather than focusing on households in the age groups that are typically looking to purchase homes.

The Reserve Bank of Australia has used an alternative measure of affordability that represents an estimate of the proportion of all dwellings (both houses and apartments) transacted in any year that would have been accessible to a typical household in the prime home-buying years based on certain assumptions about bank lending behaviour. The focus in Figure A2 is on households headed by people aged between 35 and 39 years as potential home buyers. The estimates suggest that in four of the major capitals, around 30 to 35 per cent of transacted dwellings (houses and apartments) would have been accessible to the median household in the home-buying age groups in 2006–07. Perth was the exception, where only around 10 per cent of dwellings would have been accessible (Figure A2). The Reserve Bank stressed that of course accessibility would have been much lower for many lower income households.

Figure A2: Measures of housing accessibility – proportion of dwellings affordable for median younger households (per cent)

Figure A2: Measures of housing accessibility – proportion of dwellings affordable for median younger households (per cent)

Sources: ABS (SIH); RBA; RP Data as used in Reserve Bank of Australia, Real Estate Institute of Australia in: A Richards, ‘Some observations on the cost of housing’, address to 2008 Economic and Social Outlook Conference, The Melbourne Institute of Applied Economic and Social Research, Melbourne, 27 March 2008, accessed 20 January 2009, <www.rba.gov.au/Speeches/2008/sp_so_270308.html>.

The UDIA/Matusik Affordability Measure claims to provide a more focused view of housing affordability than other indices by comparing the proportion of the houses sold in a particular region with what the population of that region could actually afford to buy. By assuming the average household was willing to spend 30 per cent of its income on repayments and had managed to save a 10 per cent deposit, the UDIA/Matusik Affordability Measure compares house prices to the size of the loan the average household would be able to service at prevailing interest rates. In its 2007 report into affordable home ownership in Australia,ⁱ UDIA researched 70 designated population centres in Australia and found that in 2006 over one-quarter of the subject areas (27 per cent) were categorised as unaffordable (less than 15 per cent of houses in the region could be purchased) compared with none in 2001. However, it should be noted that this approach does not work well for regions with very heterogeneous income groups. For example, the UDIA report rates Karratha as one of the more affordable parts of Australia, presumably because mining workers pull up the average income. But as the Senate Select Committee pointed out, for other workers housing is extremely unaffordable in Karratha.ⁱⁱ

Finally, in terms of measuring housing stress, a weakness of regarding all households spending over 30 per cent of their income on housing as suffering stress is that households with high incomes can spend more than that proportion, and indeed do so – for example, to pay off their mortgages more quickly while still having income to spend elsewhere. For this reason, the measure has been restricted to households in the lowest 40 per cent of the income distribution, as used in major research such as the Australian Housing and Urban Research Institute’s (AHURI’s) research into housing affordability for lower income Australians.

Other measures of affordability

Other measures are currently used to both contribute to the explanations of the causes of affordability problems faced at a particular point of time and indicate trends over time. These measures include:

ratio of median household income to average loan repayments
ratio of mortgage repayments on a typical loan for households on average full-time male earnings, assuming a 25-year loan and 25 per cent deposit
supply of low-cost or affordable housing stock available to low income renters
threshold income, which is defined as the level of income deemed necessary to gain access to the median priced dwelling or one that is some percentage (for example, 75 per cent) of the median
areas where the median dwelling price is affordable to households whose incomes are in the 40th and 20th income deciles (purchasers).

Each of these measures provides a different way of capturing the changing ability of households to afford home purchase or to access rental. As AHURI research notes, none is necessarily better than the others; they all have different strengths and weaknesses, including overcoming the challenges of data limitations and methodology.ⁱⁱⁱ Table A6 summarises the characteristics of each method.

Table A6: Attributes of major affordability measures used in Australia
Producer/objective	Data source	Methodology
AMP/Real Estate Institute of Australia Aligns median household income to average loan repayments	Median weekly family income figures are based on ABS Family Income Surveys. Loan repayments are derived from financial institution data	Calculated as ratio of median household income to average loan repayments.
BIS Shrapnel Home Loan Affordability Index Measures access costs for household or individual on average weekly earnings	ABS average weekly earnings per employed male unit Real Estate Institute of Australia (REIA) loan data	Ratio of mortgage repayments on a typical loan (as measured by REIA data) to housing loan to average full-time male earnings, assuming 25-year loan and 25 per cent deposit
Burke & Hayward 2002; Burke 2003 Uses threshold income to measure the amount of income deemed necessary to gain access to the median-priced dwelling	Based on Valuer-General (VG) median price dwelling data	Works back from VG median to calculate the required loan and the income to support the loan
Wood et al. 2004 Identifies areas where median dwelling price is affordable to households whose incomes are in 40th and 20th income deciles (purchasers)	VG median house price data ABS Survey of Income and Income Distribution (1999–2000) for incomes of income units in 20th and 40th deciles	Calculates the degree to which local areas are affordable to low income households
Yates, Wulff and Reynolds 2004 Measures the amount of and changes in low-cost rental stock available to low income households	ABS Census special cross-tabulations	Identifies for nominated rental price ranges the amount of stock available in relation to number of low income households

Source: Australian Housing and Urban Research Institute, Conceptualising and measuring the housing affordability problem, National Research Venture 3 background paper 1, AHURI, Melbourne, May 2005.

The distribution of mortgage stress

Table A7 presents a Housing Industry Association (HIA) analysis of the distribution of mortgage stress across the population of home purchasers based on the 2006 Census. Using a simple 30 per cent rule, the data show an overall mortgage stress rate of 26.9 per cent for Australia. For the purpose of this analyses ‘mortgage stress’ is not just limited to households in the bottom two income quintiles. The number would be slightly higher had zero and negative incomes been included. Most analysts recommend that these households be excluded (if not the entire first quintile) due to under-reporting of incomes or the inclusion of business income, which is often volatile and misrepresents a household’s spending capabilities.

Table A7: Census 2006 mortgage stress rates
Gross income range ($)	Stress rate (%)	No. of households	Cumulative (%)
1–149	97.4	10,011	1.9
150–249	83.4	17,567	5.1
250–349	75.3	26,314	10.0
350–499	61.5	18,938	13.5
500–649	64.7	74,860	27.4
650–799	53.6	66,009	39.7
800–999	43.4	67,901	52.3
1,000–1,199	33.6	94,282	69.8
1,200–1,399	23.7	39,197	77.0
1,400–1,699	18.7	47,594	85.9
1,700–1,999	13.1	28,159	91.1
2,000–2,499	8.9	20,404	94.9
2,500–2,999	9.1	17,652	98.2
3,000–3,499	6.3	4,920	99.1
3,500–3,999	5.3	2,737	99.6
4,000 or more	5.0	2,210	100.0
Total households in mortgage stress	26.9	538,755
Total households with mortgages	100.0	2,003,478

Source: HIA analysis of the distribution of mortgage stress.

Stress rates are highest among low income groups; however, the incidence of stress also falls more heavily in middle income groups. Adding the bottom 40 per cent (<$800 per week) income rule reduces household stress to 10.7 per cent, and including up to 60 per cent (<$1,200) increases the rate to 18.8 per cent.

The census numbers are based on August 2006 data, which are considered out of date as it does not incorporate subsequent interest rate and house price changes. The census also misses around 800,000 households that did not report incomes properly. In response to this issue, many analysts prefer to use the ABS Survey of Income and Housing for analysis at the national and State level. The ABS survey also provides the ability to simulate the impact of changes, such as interest rate changes, since the Census.

HIA analysis has updated the ABS survey to August 2008 to incorporate income, price and interest rate changes since the survey was taken in 2005–06. Past HIA analysis shows that the stress rates are not significantly different between the census and the survey; however, because the survey has proportionately fewer households with missing values, the number in stress is much higher (Table A8).

Table A8: HIA estimates of mortgage stress by capital cities and rest of state in August 2008
	No. of households	% of mortgagees
Sydney	225,832	40.0
Rest of NSW	93,374	31.5
Melbourne	159,423	31.9
Rest of Vic.	53,755	28.0
Brisbane	75,960	30.2
Rest of Qld	92,299	32.6
Adelaide	39,221	24.3
Rest of SA (a)	14,238	23.2
Perth	79,355	31.0
Rest of WA (a)	15,895	24.6
Tasmania	14,991	22.3
NT (a)	3,510	17.6
ACT (a)	13,036	23.6
Australia	880,889	31.8

(a) Subject to small sample sizes.

Note: This table does not incorporate the impact of interest rate reductions or house price changes since August 2008.

Source: HIA calculations based on updating the : Australian Bureau of Statistics, Survey of Income and Housing: CURF on CD-ROM/RADL, 2005–06 (Second Edition), cat. no. 6541.0.30.001, ABS, Canberra, 2008 to August 2008 values.

Since the August 2006 Census the strong growth in rent costs is well documented and HIA has used the ABS Survey of Income and Housing data to model this. Table A9 summarises the rent stress situation as it stood in August 2008 (rents have been assumed to have increased by 10 per cent in real terms).

Table A9: Estimates of rent stress – impact of 10% increase in real rents, August 2008
	January 2006 Rent stress	%	August 2008 Rent stress	%	% change
Sydney	121,073	29.1	151,610	36.4	25.2
Rest of NSW	65,697	31.2	73,830	35.0	12.4
Melbourne	112,772	33.3	128,059	37.8	13.6
Rest of Vic.	33,734	33.1	36,632	36.0	8.6
Brisbane	43,481	23.1	53,919	28.6	24.0
Rest of Qld	60,569	25.3	75,063	31.4	23.9
Adelaide	27,182	26.9	29,605	29.2	8.9
Rest of SA (a)	6,554	21.4	7,822	25.5	19.4
Perth	31,798	23.5	37,862	28.0	19.1
Rest of WA (a)	7,830	16.1	11,806	24.3	50.8
Tasmania	9,574	24.6	11,296	29.0	18.0
NT (a)	1,525	10.0	2,317	15.2	51.9
ACT (a)	4,560	16.6	5,956	21.7	30.6
Australia	526,347	27.8	625,776	33.1	18.9

(a) Subject to small sample sizes for private renters.

Sources: Australian Bureau of Statistics, Survey of Income and Housing: CURF on CD-ROM/RADL, 2005–06 (Second Edition), cat. no. 6541.0.30.001, ABS, Canberra, 2008ABS Survey of Income and Housing 2005–06 and HIA calculations.

Using HIA’s latest updates for August 2008, a simple addition of those in mortgage and rent stress implies that there are 1.5 million households paying more than 30 per cent of their gross income on housing. Around 950,000, or 63 per cent, of these households are in the bottom 40 per cent of the income distribution.

i. Urban Development Institute of Australia, An industry report into affordable home ownership in Australia, August 2007, Part 2, ‘UDIA state reports on housing affordability’, UDIA, Canberra, 2007

ii. Senate Select Committee on Housing Affordability in Australia, A good house is hard to find: housing affordability in Australia, Senate Select Committee on Housing Affordability in Australia, Canberra, June 2008, p. 33.

iii. Australian Housing and Urban Research Institute, ‘Conceptualising and measuring the housing affordability problem’, National Research Venture 3 background paper 1, AHURI, Melbourne May 2005.

1. Australian Bureau of Statistics, Population Projections, Australia, 2006 to 2101, cat. no. 3222.0, ABS, Canberra, 2008.

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