Bridging the gap between housing stress and financial stress

the case of Australia
JournalHousing Studies
AuthorsSteven Rowley, Rachel Ong ViforJ, Marietta Haffner
PublishedDecember 2014
PublisherTaylor and Francis Online

In recent decades, housing affordability has been increasingly linked to household financial outcomes where high housing costs relative to income are perceived to negatively affect financial well-being. However, the traditional measure of housing affordability in Australia is housing stress, which is subject to widespread criticism as an inadequate representation of overall financial stress. This methodological paper first determines the extent to which housing stress correlates with experiences of financial stress and, second, demonstrates ways in which the measure can be modified to deliver a more reliable indication of how housing costs affect financial well-being. The study contributes to the international literature by showing how the use of longitudinal data can improve the measure of housing stress providing a more accurate assessment of the relationship between housing costs and financial well-being.