Concept of Housing Affordability

Concept of housing affordability Affordable housing is a basic right. It includes rental and home purchase opportunities. Other features of affordable housing include it is well built, located close to transport, shops, hospitals and community services, as well as suited to its residents. Housing affordability can be viewed from three different perspectives: The affordability for renters; The affordability for would-be home owners; The affordability for existing homeowners. There are several concept of housing affordability: Description of household expenditure For housing to be affordable, it should cost a proportion of the household income that leaves enough money for basic costs such as food, clothing, healthcare and education. The target for affordable housing is people wanting to buy or rent a home whose household incomes are described as low to moderate. In South Australia, a low income is up to 80% of the gross annual median household income, and a moderate income household is between 80 and 120% of the gross annual median income. The most widely used measure of housing affordability is that households should pay no more than 30% of their income in mortgage repayments, or 30% (plus Commonwealth Rent Assistance) in rent. Analysis of trends- housing prices The increase in housing prices can be accounted for by factors affecting demand and supply. Demand factors include income and the rate of return on other assets, whereas the prices of land and construction costs are supply factors. When the prices of land and the material use in construction is inflate, the costing will increase then make the housing prices will increase too. By this, household needs to expand more income to pay for housing when the housing price was increase. Administration of public sector housing subsidies The Government aims to create prosperous, inclusive and sustainable communities. Everyone should have the