Renters are spending more of their weekly income on housing costs than those with a mortgage, according to research by RP Data.
RP Data’s latest Property Pulse reported that renters on average spend 20% of their gross weekly income on housing, versus 18% for mortgagees. The number of renters putting more than half of their salaries into housing costs was also higher.
“Only 6.9% of mortgage holders were spending more than 50% of their income on housing costs,” RP Data senior research analyst Cameron Kusher said, adding that the number of renters spending more than half their wages on rent was at 9.1%.
The RP Data research also indicated that over 2009 and 2010, average housing costs were lowest for owners without a mortgage, who paid $35 a week in housing costs – usually for utilities and maintenance. Home owners who still had a mortgage paid $408 a week over the same period, with approximately $373 dedicated to paying the mortgage.
Renters were typically paying $275 a week on their housing costs. However, Kusher said that the difference in occupancy costs could be attributed to the extra cost of rates and utilities, which are generally paid by property owners.
He added that, despite lower costs, renters spending a larger proportion of their income on housing costs reflected the fact that mortgagees typically earn more than those renting.
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