Nowadays, housing cost has become most important factor that can contribute in poverty level, economic growth etc. Housing cost is the cost that individual pays to buy house which includes each and every aspect like availability of funds, ability to repay loans, level of funds availability and many more aspects. In Australian economy, housing cost can be seen growing at constant rate and income level of individuals (at macroeconomic level) has been decreasing with high spending rate. Major component of spending items for residents of Australia is housing cost that they have to pay for financial institutions (Martorano, 2015).
In recent time (after financial crisis), poverty level is affected by housing cost to a great extend as there poverty level and housing cost both depend on flow of funds or financial resources in the economy. During the time of financial crisis or rescission, there is low availability of funds and on the other hand housing cost has reached to its maximum rate. Therefore individuals residing in Australia were facing dual trouble. Here, dual trouble means that firstly there is low level of fund availability and they are not able to repay or discharge their financial obligation. Secondly they were pushing towards poverty threshold line and from other side poverty line is increasing at great rate. Because of financial crisis, financial institutions are not able to generate funds but the only way for them is housing interest that they receive. This is the main reason behind increasing housing cost that individuals have to pay (Martorano, 2015). Home ownership has losing its insights because of low income level. From this situation it can be concluded that housing cost has been one of the important factors that had contributed in poverty in Australia.