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Housing Stress or Transport Stress? Issues in Australian Housing Affordability

Author

Listed:
  • Yogi Vidyattama

    (NATSEM, University of Canberra)

  • Robert Tanton

    (NATSEM, University of Canberra)

  • Binod Nepal

    (NATSEM, University of Canberra)

Abstract

Housing stress is usually measured on the basis of income and direct housing costs such as mortgage repayments and rents. One cost that is not included in calculations of housing stress, but which may be important, is the difference transport costs make. Especially in city areas, paying a premium for a house that is close to work may offset the additional transport costs incurred getting to work. So a measure of housing stress which includes transport costs may give a different picture of housing stress to a measure that ignores transport costs. In this paper, we argue that transport costs need to be taken into account in measuring housing stress not only in the capital cities but also outside capital cities. We find that in capital cities, bringing transport costs into a housing stress measure increases the number of both purchasers and renters in housing stress by 25 per cent, and it particularly affects households with children. However, we also find that the impact of transport cost is even greater outside capital cities.

Suggested Citation

  • Yogi Vidyattama & Robert Tanton & Binod Nepal, 2011. "Housing Stress or Transport Stress? Issues in Australian Housing Affordability," NATSEM Working Paper Series 11/06, University of Canberra, National Centre for Social and Economic Modelling.
    • Handle: RePEc:cba:wpaper:wp116
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    File URL: http://www.natsem.canberra.edu.au/files/download?id=699
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    References listed on IDEAS

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    1. Timothy Smeeding & Gunther Schmaus & Brigitte Buhmann & Lee Rainwater, 1988. "Equivalence Scales, Well-Being, Inequality and Poverty: Sensitivity Estimates Across Ten Countries Using the LIS Database," LIS Working papers 17, LIS Cross-National Data Center in Luxembourg.
    2. Brigitte Buhmann & Lee Rainwater & Guenther Schmaus & Timothy M. Smeeding, 1988. "Equivalence Scales, Well‐Being, Inequality, And Poverty: Sensitivity Estimates Across Ten Countries Using The Luxembourg Income Study (Lis) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-142, June.
    3. Judith Yates, 2008. "Australia's Housing Affordability Crisis," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(2), pages 200-214, June.
    4. Buhmann, Brigitte, et al, 1988. "Equivalence Scales, Well-Being, Inequality, and Poverty: Sensitivity Estimates across Ten Countries Using the Luxembourg Income Study (LIS) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-142, June.
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