There is lots of data on housing in the Survey of Income and Living Conditions. Almost all of it is published by Eurostat rather than directly by the CSO itself. That alone means much of it can be hard to find and even harder to pull together.
The initial intention was to look at the data for the impact of the current housing problems in Ireland but this post has ended up being a bit of a data dump – a hodge-podge of what the SILC has to say about housing and housing costs without any real end-point in mind. It may be better to move to the next post which will try to isolate those bits that reflect the Ireland’s current housing problems rather than plough through the 11 tables and 22 charts that follow.
So, what can the SILC tell us about households, housing and housing costs? Quite a lot actually. We will look at:
- household type and tenure status
- housing size and under-occupied housing
- housing and environmental deprivation
- housing costs and the burden of housing costs
The first thing to note in almost all cross-country comparisons is that countries are different. For households and housing one of the key difference is demographics. If countries have different population structures it can be hard to compare like with like.
The table shows the composition of the population used for the EU-SILC by age group. The columns are Ireland’s rank in the EU15 from largest to smallest, the proportion in Ireland, and the arithmetic mean of the proportions in the other 14 countries of the EU15. Ireland ranks highest for the youngest age group and towards the bottom for those from 50 years and above. Click to enlarge.
Noting these differences we can begin to look at household type. The distribution of these in Ireland has been reasonably steady for the past decade and a half.
At the top of the chart it can be somewhat seen that the share of households comprising three or more adults with dependent children has fallen over the past 15 years (from around 9 per cent of households in 2003 to around 5 per cent in 2016). The categories showing the offsetting increase are households with two adults and two dependent children and households with two adults at least one aged 65 years or older.
It is probably more instructive to look at the distribution of household types across countries (again noting the countries have different demographic structures!).
As a proportion of all households, Ireland has the highest proportions in the EU15 of households comprising:
- a single person with dependent children, and
- households of two adults with three or more dependent children.
At the other end Ireland is second to last for single person households, both those with one adult younger than 65 and those with one adult aged 65 or older.
The distribution of households by household type is useful but it misses one key point: some households have more people in them than others. Looking at distributions by household can give the same weight to a single person household as to a two-adult household with dependent children.
Households with one adult younger than 65 made of 12.4 per cent of households in the 2016 SILC for Ireland but these were just 4.6 per cent of the population. On the other hand, households with two adults and three or more dependent children were 8.1 per cent of households but the people in them were 16.1 per cent of the population.
Here is the distribution of households by household size. Ireland has the lowest proportion of small households (2 persons or less) and the highest share of large households (5 persons of more) in the EU15.
And it can be seen from the next table that Ireland’s relatively large share of households with five persons or more is a function of the number of households with children. Again, click to enlarge.
There can be legitimate reasons for using the distribution by households or the distribution by population but the distribution by population is generally the more appropriate as it better reflects the number of people involved.
Anyway, after that bit of scene-setting we now turn to the housing of these households. First, their tenure status:
The largest change has been the increase in tenants who pay rent at the market price. The share of the population living as owners with no outstanding loan or mortgage fell from 46.5 per cent in 2004 to 33.8 per cent in 2014. It has edged back up in recent years and was 36.8 per cent in 2016.
Here is the distribution of households by tenure status across the EU15.
In comparative terms we see that Ireland ranks high for people living as tenants with rent at reduced price or free and rank low for people living as tenants with rent at market rate.
Ireland is roughly in the middle of the EU15 for the share of the population living as owner-occupiers at 70 per cent. It is also worth noting that the three countries which are top for owners with a mortgage or loan (Netherlands, Sweden and Denmark) are bottom for owners with no outstanding mortgage or loan.
One chart is sufficient to show the type of dwellings used in Ireland.
Almost everybody in Ireland lives in houses (either detached, semi-detached or terraced). It was 97 per cent in the 2006 SILC and was still at 92.5 per cent by 2016. There are four countries in the EU15 where fewer than 50 per cent of people live in houses (Italy, Greece, Germany and Spain).
We also live in dwellings, that relative to the rest of the EU15, are under-occupied.
For all countries, the highest rates of under-occupied housing occur within older age groups though there is significant variation across countries. Over 90 per cent of Irish people aged 65 or over live in under-occupied dwellings compared to an average for this age group across the rest of the EU15 of 58 per cent.
The definition of under-occupied dwellings is based on the number of rooms and is available here. Irish dwellings seem to have lots of rooms with owner-occupiers having the highest average number of rooms per person in the EU15.
Counter to this view, an ad-hoc module included with the 2012 SILC collected details on dwelling size and this showed that Ireland had close to the lowest average dwelling sizes in the EU15.
In old money, the 80.8 square metre average shown for Ireland is equivalent to 870 square feet.
The SILC has four items that are used as measures of housing deprivation. These are households:
- Living in a dwelling with a leaking roof, damp walls, floors or foundation, or rot in window frames or floor;
- Having neither a bath, nor a shower in their dwelling;
- Who do not have an indoor flushing toilet for the sole use of their household; and
- Who consider their dwelling as too dark.
Here are the levels of these in each of the countries in the EU15 in 2016 plus the share of households that experienced at least one of these housing deprivation items. Click to enlarge.
The SILC using three measures to assess environmental deprivation linked to the dwelling. These are:
- Noise from neighbours or from the street,
- Pollution, grime or other environmental problems, and
- Crime, violence or vandalism in the area
Ireland comes out best for noise and pollution and overall has the lowest share of the population living in dwellings suffering from one or more or the environmental deprivation indicators.
Another indicator of housing poverty is overcrowding. Ireland had the lowest housing overcrowding rate in the EU15 in 2016. The Eurostat definition of overcrowding is here.
The following chart shows how the overcrowding rate has varied by tenure status in Ireland since 2004. Although there has been little or no change in the rates for owner-occupiers in the past few years an upward since 2012 or 2013 can be identified for tenants.
Overcrowded households who experience at least one of the housing deprivation items are categorised by Eurostat as suffering from severe housing deprivation. Given Ireland’s extremely low rate of housing overcrowding it is not surprising that Ireland’s severe housing deprivation rate is also low relative to the rest of the EU15. In 2016, one per cent of Irish households experienced severe housing deprivation as measured by the SILC, the second lowest in the EU.
Turning to housing costs Eurostat produce a measure for “total housing costs” as a share of disposable income.
As a share of disposable income Ireland has the second-lowest housing costs in the EU15. The average share was 16.8 per cent of disposable income in 2016. The picture isn’t much different if we look at the median instead of the average with Ireland again being towards the bottom.
In 2016, in Ireland the median housing cost burden was 11.8 per cent of disposable income. Half of households had a housing cost burden that was less than this.
Of course, we would like to know what is included in “total housing costs” used as the numerator in the above charts. The details are provided here. For all tenure types it includes the following if they are paid by the occupant:
- Structural insurance,
- Mandatory services and charges (sewage removal, refuse removal, etc.),
- Regular maintenance and repairs,
- Taxes, and
- The cost of utilities (water, electricity, gas and heating).
For all tenure types housing costs are considered gross of any housing benefits (i.e. housing benefits should not be deducted from the total housing cost), then for each tenure type it also includes:
OWNERS: Mortgage interest payments, net of any tax relief
TENANTS at market price: Rent payments
TENANTS at reduced price: Rent payments
The most notable thing is that principal repayments on mortgages are not included as part of “total housing cost”. In part, this reflects the element of choice involved. If two borrowers take out identical mortgages except one is over 15 years and one is over 25 years it is not appropriate to consider that the household with the shorter term has higher housing costs – they have a higher savings rate. Of course, the degree to which households have control over the pace of capital reduction on their mortgage may not make it a matter of choice at all.
There will also be differences across countries where borrowers in some countries tend not to make ongoing capital repayments (which may explain what we saw for The Netherlands, Sweden and Denmark in the previous table).
Thus, it could be argued that this measure of “total housing costs” doesn’t give a full picture of housing costs but rather is the answer to a question that seeks to find something that is consistent across households and countries and not subject to change due to choices or preferences. The size and length of mortgage payments will still be picked up through the interest component of “total housing costs”.
It would be useful if “total housing costs” as a share of disposable income was provided by tenure status but it does not seem to be available. It is, however, provided in Purchasing Power Standard (PPS) units though for “owners” and “tenants”.
It would be useful if owners were broken down by those with a mortgage or loan and those with none and if tenants were broken down by those paying the market price and those paying a reduced price. This is particularly true for Ireland where there are more tenants paying rent at a reduced price then at the market price.
The chart for tenants above shows housing costs rising but by less than two per cent a year since 2012. This will be dampened by the presence of tenants paying a reduced price (such as to local authorities) in the cohort.
Eurostat also provide for tenants as of the share of rent in disposable income for tenants. Again, it is for all tenants so those paying a reduced price and the market price will be included. As a share of the average disposable income of renters Ireland has the lowest average rents in the EU15.
Eurostat measure the housing cost overburden rate as being the share of population living in households where total housing costs (as defined above) exceeds 40 per cent of household disposable income. Ireland has the second lowest housing cost overburden rate in the EU15.
Ireland might have the next-to-lowest level for all households but as with most of these measures there is plenty going on under the surface. Here is the 2016 breakdown of the housing cost overburden rate by tenure status.
Ireland’s overall rate might be 4.6 per cent but for tenants with rent at the market price the housing cost overburden rate is 19.6 per cent. Thus, just under one-fifth of tenants paying market rates had “total housing costs” in excess of 40 per cent of their disposable income. As shown here this has always being the tenure status with the highest rate in Ireland.
It may also be surprising how little this is changed over the past few years. Though there has been some increases since 2013, the changes are unlikely to be statistically significant and the 2016 rate is pretty much bang on the average since 2004.
The picture is much the same if we reduce the threshold. The next chart looks at the share of the population by tenure status where “total housing costs” exceed 25 per cent of disposable income. Again tenants paying the market rate fare worst but lack of deterioration over recent years is again notable.
Given increases in asking rents one might have expected the housing cost overburden rate for tenants paying market prices to have increased in recent years but that is not what the SILC is showing – up to 2016 at any rate.
And here is the housing cost overburden rate for households that are at-risk-of-poverty, i.e. with an equivalised disposable income of less than 60 per cent of the median. Again, this is another instance where Ireland is best-in-class in the EU15.
Eurostat also calculate an at-risk-of-poverty rate that deducts “total housing costs” from household disposable income. This uses the standard at-risk-of-poverty threshold (i.e. 60 per cent of the median equivalised disposable income) but compares it to household income after housing costs have been subtracted.
Using this approach Ireland had the fifth-lowest rate in the EU15. Housing costs include tenants and rents at the market price but this has not resulted in any noticeable increase in this measure (up to 2016 at any rate).
As “total housing costs” used to calculate the above shares and rates excludes capital repayments on mortgages it may be that the calculations and ratios do not give a full insight into housing costs. To this end, participants in the SILC are asked to assess the “financial burden” of their housing costs on the scale of:
- is a heavy financial burden,
- is a financial burden, and
- is not a financial burden.
Here is the share of people living in households who consider the impact of their housing costs (including capital repayments on mortgages) to be a heavy financial burden.
This is likely closer to what we expect for Ireland. The share of people living in households experiencing a heavy financial burden due to housing costs increased after 2007 and reached 43.3 per cent by 2013. It has since fallen back and was down to 32.4 per cent in 2016, though still the fifth highest in the EU15. Again, we see The Netherlands, Sweden and Denmark grouped at the bottom.
The above pattern for Ireland is reflected in the pattern of arrears. It should be noted that in the SILC arrears is measured as current missed payments rather than a measure of the build-up of cumulative arrears in the past.
And within the overall category of arrears here are arrears on mortgage payments or rents.
The recent pattern of this for Ireland seems rather surprising. The high levels up to 2013 are not surprising but the drop-off seems a bit too dramatic and Ireland having the lowest level of arrears on mortgage or rent payments in the EU15 in 2016 does not sit right.
The pattern of arrears on utility bills is closer to what we would expect.
Anyway, with nothing in particular to say that’s as good a place to stop as anywhere. Next, we’ll try to pick through all that to see if there is any coherence to it.
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