A household is defined as being in housing stress when it pays more than 30 per cent of its gross income in housing costs and its income is amongst the lowest 40 per cent of all households (the 30:40 rule). Housing stress is only weakly linked with measures of financial wellbeing, with 45 per cent of those in housing stress indicating they were ‘reasonably’ or ‘very’ comfortable financially. Moves out of housing stress are also not statistically linked with improvements in financial stress.

Housing stress is relatively high among renters, but is becoming increasingly apparent among purchasers. In particular, it may also affect older home-purchasers who have not yet paid off their mortgage debt. Housing stress may be precipitated by adverse life events such as a marriage break-up, but it is also linked to favourable events such as a pregnancy or promotion at work. It might also result from households voluntarily seeking higher quality housing and neighbourhoods.