The size of households and the types of homes being built are growing out of proportion in Australia’s housing market. New data shows that most households today have only one or two people living in them. However, the majority of available housing is still large three- or four-bedroom homes, which creates a critical gap in supply and raises concerns about long-term housing affordability.
bar chart illustrating the gap between average household size and average dwelling size using credible data
Small Families, Big Houses
While the market is still dominated by larger homes, about 60% of Australian households now only have one or two people living there. According to census and housing data, 27% of households are made up of only one person, but only 6% of homes are built as one-bedroom or studio apartments. Because of this structural imbalance, smaller households are often forced into large, expensive homes.
One interesting fact is that more than 1.3 million two-person households are now living in homes with three bedrooms. This suggests that many households in australia are not selecting large homes, but rather are being forced to make do with what they have in the current market.source
Issues with a growing older population and layoffs
Almost 40% of people who live alone are 65 or older, and many would rather “downsize” to a smaller home that is easier to take care of. On the other hand, stamp duty is still a big problem that keeps retirees from selling their homes and moving to better places to live. This makes things worse because bigger homes stay full while younger families still can’t find enough homes.
Holes in Policy and Supply
In the next five years, the federal government wants to build 1.2 million new homes. However, experts say that progress is already behind schedule. One big reason is that builders are still making new homes with more space, like bigger detached homes. Developers say that the cost of land, planning rules, and building materials make it easier to build bigger homes, even though there is a clear need for smaller homes.
There aren’t enough small, well-located apartments to meet demand, which makes the rental market even more competitive. Experts say that building more one- and two-bedroom units could help with both cost and access.
Investors can find opportunities in a market that is changing.
The trend shows that buyer agents and investors have new opportunities.As people get older, they will want smaller homes more and more.Investors who expect these changes may be in a good position to get long-term value.
The current mismatch is due to both market forces and problems with policy and planning at the system level.
In today’s competitive market, it’s essential to have the right plan and help when working with buyers. At Investmate, we help buyers navigate challenging situations by providing them with detailed information about neighborhoods, real-time data, and access to off-market deals. Our buyer agent experts say that the supply of housing needs to be rebalanced quickly because more and more Australians are moving to cities and families are getting smaller. If we don’t do this, problems with affordability will continue, and older homeowners will still be stuck in subpar housing.Call us at 61421942049 or You can also visit investmateba.com.au or click on our link to book a personalized consultation and discover how we can help you and your clients with property strategies tailored to their needs/.Our goal is to help your clients make informed choices in areas where demand is high, whether they are buying their first home or are seasoned investors.