Modelling housing need in Australia to 2025

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This research develops a housing need simulation to quantify housing need. Housing need estimates have a number of uses for policymakers including resource allocation, market monitoring, setting affordable housing targets, housing assistance budgeting and evidence for affordable housing contributions via planning policy.
 
The simulation identifies the supply required to meet broad affordable housing demand rather than individualised forms of housing assistance required to meet need. The simulation estimates housing need as:
  1. the number of households predicted to form, but unable to access market housing
  2. the number of households predicted to form, but who will expend such a significant proportion of household income that they require some form of assistance to avoid a position of rental stress.

The simulation indicates the affordable housing supply necessary to meet the broad housing needs (not individual) of those households unable to access market housing (ownership or rental) and also quantifies those able to access the private rental market but placed under financial stress in order to do so.

Housing need arises from the interaction of demographic effects (population projections combined with propensities of different groups of people to

form new households) with the labour market and housing system. The housing need simulation consists of five interrelated models of the housing market, labour market, labour market earnings, household formation and tenure choice with the simulation model described in the diagram below.
 
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