Housing stress in WA persists despite market softening
Housing affordability has improved for Western Australian households, however many still remain vulnerable to housing stress and pressures, according to a new report by the Bankwest Curtin Economics Centre (BCEC).
Keeping a Roof Over our Heads is the second housing affordability report and features findings from a new survey of over 4,000 households across Western Australia, New South Wales and Queensland.
Using the latest data available, the report offers the most recent findings on changes in housing stress levels over the last decade, as well as how these stresses vary across regional locations and household types.
Lead researcher and BCEC Deputy Director, Associate Professor Rachel Ong, said that while the proportion of households that regard their housing as ‘unaffordable’ fell from around 33 per cent to 19 per cent over the last two years, low income households, especially those in regional areas were still facing pressure.
“The typical mortgage cost burden for low income households remained persistent for regional WA over the last two years at around 34 per cent of disposable household income,” Associate Professor Ong said.
“Low income households in the private rental market are the most susceptible to housing cost pressures and are unlikely to be able to buy their own home any time soon.
“An individual minimum wage worker has a real struggle to afford to enter the housing market by themselves.
“Currently, individuals living on a minimum wage cannot afford to rent a one bedroom unit in the Perth metropolitan area, despite targeting the lower end of the housing market.”
Despite a fall in housing costs burdens, residents of regional WA are more likely to view their housing as ‘unaffordable’ than those residing in regional areas of New South Wales or Queensland.
“A key factor related to housing affordability is the diversity of available housing options,” Professor Ong said.
“WA is one of the least diverse areas for housing stock options in Australia. Expanding the range of available housing both in terms of the type of dwelling and access options will help to improve housing affordability for everyone.”
The report also examines the degree to which social housing alleviates housing cost pressures for low income Western Australian households and sheds light on the complexities associated with homelessness.
Key findings of the report include:
- The mortgage cost burden for low income households in Perth has decreased from 37 per cent to 30 per cent of household disposable income.
- The median rental cost burden for low income households have persisted at 34 per cent in Perth but declined from 28 per cent to 25 per cent in regional WA.
- Measures of severe housing stress have increased more for renters in WA than the rest of Australia.
- One-third of single parents in WA regarded their housing as unaffordable.
- Social housing remains an important component of delivering affordable housing to low income households.
- WA’s regional centres are significantly more exposed to homelessness than metropolitan regions.
- The Kimberley region had the highest rate of homelessness within WA, with a rate of almost 386 persons per 10,000 population
Notes to editor:
- The Bankwest Curtin Economics Centre is an independent economic and social research organisation located within Curtin Business School at Curtin University. The Centre was established in 2012 with support from Bankwest (a division of Commonwealth Bank of Australia) and Curtin University.
- Embargoed copies of the report are available upon request. Selected charts from the report are provided with this release. Hi-resolution versions of all tables and charts in the report are available on request.
Key Findings of BCEC’s Keeping a Roof Over our Heads report
- The typical housing cost burdens faced by mortgage holders in capital cities and territories have fallen consistently over the most recent two years of housing survey data.
- Housing costs for homeowners in regional WA rank second highest of all regional areas of Australia, with housing costs at a median of 34 per cent of income.
- The share of WA homeowners who pay at least 30 per cent of incomes in housing costs have fallen from 38per cent in 2011-12 to 35 per cent in 2013-14, following a similar trend for Australia.
- Low income WA households who rely either on minimum wages or government payments struggle to keep pace with rising rents on properties at the lower end of the market.
- Just under 10 per cent of WA renters are now paying at least 50 per cent of their income in housing costs.
- More than 43 per cent of single parents in rented housing commit at least 30 per cent of their income towards housing costs whilst living on a low income
- A particular concern is the prevalence of housing stress among older age cohorts, with one in five older aged renters in severe housing stress.
- In relatively expensive housing markets such as WA, NSW and the territories, housing authorities deliver public housing subsidies in excess of $200 per week per rebated household.
- In 2015, the ratio of public housing applicants to dwelling stock was the highest in WA among all states and territories (70 per cent).
- In the WA public housing sector, the number of wait list applicants and dwelling stock have both remained more or less constant over time.
- WA accounted for around 10 per cent of the nation’s homeless count in both 2001 and 2011, after New South Wales, Victoria and Queensland.
- The West Australian Outback is significantly more exposed to homelessness than metropolitan regions.
- Homelessness is highly spatially concentrated in WA, with the Kimberley, Perth city, Pilbara, Goldfields and Stirling accounting for almost half the state’s homeless persons in 2011.
From the BCEC Housing Affordability Survey:
- Over a third of WA households paying over 30 per cent of their income in housing costs say that they are forced to do so because there were no other options.
- Just over a third (36 per cent) of households in WA indicate that a 10 per cent increase in rents or mortgage payments would have a major impact on the affordability of their housing.
- 55 per cent of WA respondents to BCEC survey reported sustaining high housing costs affected their mental health.
- 19 per cent of both owners and private renters in WA were forced to locate more than 10km away from their preferred location to access affordable housing in 2015. For those households residing in their preferred location, half had to make sacrifices to access the location.
- Almost a quarter of all regional respondents reported that their housing was unaffordable, compared to just 17 per cent of those in metropolitan areas.
- Respondents in regional WA were far more likely to be forced to take on a high housing cost burden than metropolitan respondents, particularly in order to access a suitable location.
- Respondents from regional WA were more likely to perceive their housing as unaffordable (24 per cent) and least likely to perceive their housing as affordable (36 per cent) than respondents from regional areas in New South Wales and Queensland.
- West Australians spend more time commuting than they would prefer than those who live in New South Wales or Queensland.