In this paper Ann Harding, Ben Phillips and Simon Kelly found examine trends in housing stress between 1998 and 2004, using specially created versions of NATSEM's STINMOD model. For the latter year, NATSEM was required to update the ABS 1999-00 and 2000-01 Surveys of Income and Housing Costs to 2004 estimates. While we employed what we consider to be reasonable assumptions to undertake this updating, the results can only be regarded as indicative for 2004.

The definition of housing stress used in the study was that housing costs were greater than 30 per cent of disposable income and that the income unit was in the bottom 40 per cent of the income distribution. Using this definition, the sudy suggests that, by 2004, 8.8 per cent of income units were experiencing housing stress, down from 10.7 per cent in 1998.

But this definition of housing stress excluded the majority of home purchasers, only a small proportion of whom fell into the bottom 40 per cent of the income distribution. The study supported public perceptions about problems of housing affordability for first home buyers, with mortgage repayments as a percentage of disposable income increasing during the past six years for first home buyers.