Census 2021: Mortgage, rental stress comes off the boil

Australians felt some relief in meeting housing costs over the past five years with census data revealing a drop in mortgage and rental stress. At least until now.

Heather and Adam Richards with baby Poppy in Brisbane. Picture: Lyndon Mechielsen

Households felt some relief in meeting housing costs over the past half-decade, according to the 2021 census, which revealed a drop in both mortgage and rental stress.

Three out of four Australian households (74 per cent) with a mortgage reported dedicating 30 per cent or less of their total ­income to repayments, the level considered as the stress test on budgets. It is a significant increase on the 2016 census, when little more than two-thirds of households (67.3 per cent) were in the same position.

Likewise, despite pressure on the rental market with low vacancies and rising rents, the number of tenants committing 30 per cent or less of their income to the weekly payments rose 6.2 percentage points to 58.7 per cent in 2021.

But experts have warned families may be feeling more under pressure.

The half-decade data collection was undertaken in August 2021, at a time when mortgage interest rates were at near-record lows off the back of the pandemic. It does not capture the recent rate hikes, the end of the most recent housing boom, rapid rental increases or the spike in inflation.

Brisbane homeowners Heather and Adam Richards said the ease of meeting payments on their variable mortgage had been relatively unchanged over the past year despite a 0.75 per cent ­increase in interest rates in the past two months. Instead, Ms Richards, who owns a hairdressing salon called Little Hair Nest, said the cost of everything else had gone up. “The budget is still manageable,” she said. “We don’t live ­beyond our means but it does have an impact. You have to really think about doing things and what you are going to buy.”

The census found the number of households feeling under pressure to pay their bills fell across the board but there were still some stress points. Mortgage holders ­allocating more than 30 per cent of their wage totalled 14.5 per cent of all households, down 4.9 percentage points from 2016.

Almost a third (32.2 per cent) of those renting were overextending themselves on the same measure, but that was still 3.8 per percentage points lower than the last census.

PropTrack economist Angus Moore said the housing landscape has changed considerably since the national data was collected. “Mortgage rates have risen, which has increased repayments for many mortgage holders, and rents have also gone up, which changes the picture somewhat.”

The Australian Bureau of Statistics was unable to produce a stress measure for 11.6 per cent of households with a mortgage and 9.1 per cent of those renting.

Home ownership rates stayed relatively steady from the 2016 (65.43 per cent) to the recent census (65.93 per cent), halting a decades long trend of decline from the highs of the 1970s.

Chief executive of social housing agency PowerHousing Australia Nicholas Proud said the result comes despite generous first-home buyer and home builder grants that drove a record amount of first-home buyer ­activity in the beginning of 2021.