The residual income method: a new lens on housing affordability and market behaviour

This study was designed to explore the viability of an alternative method of measuring affordability (the residual income method) to that of the ubiquitous 30 per cent benchmark method and to use this alternative method for enriching understanding around a range of affordability and housing market issues. The work has been exploratory but it does reveal both the potential and the limitations of the method. This Final Report was preceded by a Positioning Paper (Stone et al. 2011) which reviews the national and international literature on measuring housing affordability and outlines the methodology and assumptions behind the residual income method