What types of Australian households are in housing affordability stress?

A residual approach, based on the level of disposable income after housing costs have been met, compared to a budget standard, is used in this article to measure housing affordability stress. An ordered probit model is developed and applied to Australian survey data for 2000–10 to identify the specific household types that are vulnerable to housing stress. While most variables behave as predicted, the benefits of education on residual income are contingent on whether housing is purchased or rented. The model provides an evidence base for more effective housing policy, targeting the household types most vulnerable to housing affordability stress.