Australians struggling with mortgage stress

From The Age, “Households struggling to pay bills”:

MORE than 10 per cent of Australian households – or 850,000 – spend so much on rent or mortgage payments they have little left over to cover other bills, a study shows.

In particular, many households that rent are struggling, with one in four considered to be in ”housing stress”.

The study, by the National Centre for Social and Economic Modelling at the University of Canberra, was commissioned by the group Australians for Affordable Housing. It kicks off a campaign today to encourage all levels of government to tackle the housing crisis.

The group’s campaign manager, Sarah Toohey, said people were struggling to build a life after they had paid their housing costs.

”People feel the impact of food and utility price increases so keenly because housing costs take up so much of their income,” she said.

The study, Housing Costs Through the Roof, focuses on households with the lowest 40 per cent of incomes, taking family size into account, who spend 30 per cent or more of income on rent or mortgage payments. This is a recognised measure of housing stress.

It found almost 300,000 renters and home buyers in New South Wales were in ”housing stress”, at risk of falling into poverty once they had paid for a roof over their heads.

After Hobart, Sydney put the tightest squeeze on renters with 25 per cent, or almost 107,000 households, deemed to be in housing stress, and 180,000 in NSW.

A high proportion of Sydney’s 15,134 first home buyers were also at risk of poverty – 15 per cent – but not as high as in Hobart or Melbourne. Overall, almost 74,000 mortgagors in Sydney were struggling, and 112,000 in NSW.

“Government action needs to be coordinated to deliver the goal of affordable housing, by providing:

• More low cost rental housing
• More opportunities for low income households to get into home ownership
• Better financial assistance for low income renters
• Revised housing investment tax arrangements to put them on a fairer footing with other investments
• Options to make home ownership easier for first home buyers
• A clear national plan to deliver affordable housing to all Australians”

How can the government create “more opportunities for low income households to get into home ownership”?  For example, could the government provide super low mortgages to suitably qualified people?  This is just one idea, that probably has a range of faults.  What else can the government at all levels do to ease housing affordability?