Housing expense ratio
1 in 5 households spends more than 30% of their earnings on housing
In 2018, 1 in 5 households in Flanders reported that more than 30% of their disposable income went to bare housing costs. These are the expenditures of households that go towards paying the rent or a mortgage loan, excluding supplementary housing expenses such as insurance, duties, maintenance and utilities.
This share has remained stable compared to 2013. A rise had been signalled during the 2005-2013 period.
Tenants and lower income groups often have a higher housing expense ratio
In 2018, 52% of private tenants and 23% of social housing tenants had a housing expense ratio in excess of 30%. These are the same proportions as those in 2013. For owners with a mortgage, the proportions have remained stable. During the 2005-2013 period, every sub-market had still witnessed a rise.
Not surprisingly, there is a link between the housing expense ratio and income. As income rises, the proportion of households with a high housing expense ratio falls. Among the lowest income group, just over 3 in 10 households have a high housing expense ratio. Among the highest income groups, this figure stands at 1 in every 10. Here too, the negative trend witnessed over the 2005-2013 time frame has come to a halt.
Nearly 1 in 2 private tenants spend more than 40% of their income on total housing cost
When assessing the affordability of housing, it is possible to look at the total housing cost instead of the naked housing cost. The total housing costs do not only concern the rental costs or repayment of the housing loan, but also additional housing expenses for insurance, taxes, maintenance and utilities. Total housing costs can also be compared to the disposable income, whereby 40% of the income is traditionally used as a critical threshold.
In total, 18% of the households registered total housing costs above the 40% threshold in 2018, which is comparable to 2013. Almost half of the private tenants (47%) spent more than 40% of their disposable income on total housing costss in 2018, which is more than owners with a mortgage (20%) and social housing tenants (27%).
There is also a connection between the housing expense ratio and income based on the housing expense ratio based on total housing cost. In 2018, the housing expense ratio was highest for low-income households.