That work recommended that 30 per cent of income be adopted for the maximum level of housing costs for households in the bottom 40 per cent of the income distribution.1 Some commentators have since begun to apply it to all households, including those with very high levels of residual income.
More generally, the rise in real incomes since the early 1990s has substantially changed the basis on which the 30 per cent benchmark was calculated. While housing loan arrears for the country as a whole are quite low, there are some regions where the financial position of households is relatively tight. The pressures seem to be particularly concentrated in suburbs of western Sydney.