Going solo: The hidden reason why Australia needs more homes than ever
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Going solo: The hidden reason why Australia needs more homes than ever

Changing demographics are exacerbating demand for certain types of housing

By KANEBRIDGE NEWS
Mon, Sep 11, 2023 11:35amGrey Clock 2 min

The rise in single person households is exacerbating the housing crisis — and it shows no evidence of slowing down, according to new findings.

Research by Ray White says the number of people living alone in Australia is on the increase and is impacting the volume and style of homes being built.

Data from the RBA and the ABS showed that more than one in four households in Australia now have just one occupant. 

The average size of households increased during the early stages of the COVID-induced lockdowns as young people in particular returned to the family home. However, by the end of 2020, that trend started to reverse resulting in the average household size hitting a historic low of 2.48 people by August 2022.

Chief economist at Ray White, Nerida Conisbee said the results seem counterintuitive at first.

With lockdowns frequently restricting visitation levels during the pandemic, it would have seemed intuitive that people would move in together to have company. The opposite however occurred. Rising wealth as a result of record savings rates led to more people moving out on their own,” she said. 

“This higher demand for housing from more single person households led rents to rise even though population growth was very low. 

“Given the opportunity (and the money), it appears that there is a strong preference for people to not be surrounded by too many people in their homes.” 

The impact on the demand for increasing levels of housing has been significant.

“A rough calculation suggests that across the Australian population of more than 25 million people, a decline in (the Average Household Size) AHS of the magnitude observed between early 2020 and September 2022 (around 1 per cent, without any change in population growth) would alone imply an increase of around 120,000 households,” a report authored by Nalini Agarwal, James Bishop and Iris Day for the RBA said.

While the rising numbers of single person households may appear to be voluntary, Ms Conisbee said that it was not always the case. This was especially true for older Australians living in three or four-bedroom homes.

She said the existing housing stock was not keeping up with changing demographic needs.

“Australia is dominated by houses with three or more bedrooms,” Ms Conisbee said. 

“Most households with just one person have more than two spare bedrooms. While there is likely a preference by some to have a lot of spare rooms, the reality is that finding a home with just one or two bedrooms is difficult unless you want to live in a high density area or in a high rise apartment building. 

“There is a growing requirement for smaller medium density homes, particularly in inner and middle suburbs around Australia.”



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Property values have experienced strong growth around the country, but there are two highly desirable areas where oversupply is putting downward pressure on sales

By Bronwyn Allen
Tue, Jun 18, 2024 2 min

While property values are rising strongly in most markets across Australia, it’s a vastly different story in Victoria and Tasmania, new data from CoreLogic shows. Over the 12 months to May 31, the median house price lifted just 1.8 percent in Melbourne and fell 0.6 percent in regional Victoria. The median dipped 0.1 percent in Hobart and ticked 0.4 percent higher in regional Tasmania. This is in stark contrast to Perth, where values are up 22 percent, and regional Western Australia, up 14.8 percent; as well as Brisbane, up 16.3 percent, and regional Queensland, up 11.8 percent.

CoreLogic Head of Research, Eliza Owen says an oversupply of homes for sale has weakened prices in Victoria and Tasmania, creating buyers’ markets.

On the supply side, there has been more of a build-up in new listings than usual across Victoria, even where home value performance has been relatively soft,” Ms Owen said. Victoria has also had more dwellings completed than any other state and territory in the past 10 years, keeping a lid on price growth. The additional choice in stock means vendors have to bring down their price expectations, and that brings values down.”

Melbourne dwelling values are now four percent below their record high and Hobart dwelling values are 11.5 percent below their record high. Both records were set more than two years ago in March 2022. The oversupply has also affected how long it takes to sell a property. The median days on market is currently 36 in Melbourne and 45 in Hobart compared to a combined capitals median of 27. It takes 55 days to sell in regional Victoria and 64 days in regional Tasmania compared to a combined regional median of 42 days.

Changes in population patterns have also contributed to higher numbers of homes for sale in recent years. Since COVID began in early 2020, thousands of families have left Melbourne because working from home meant they could buy a bigger property in more affordable areas. While many relocated to regional Victoria, a significant proportion left the state altogether, with South-East Queensland a favoured destination. Meantime, Tasmania’s surge in interstate migration during FY21 was short-lived. Data from the Australian Bureau of Statistics shows the island state has recorded a net loss of residents to other states and territories every quarter since June 2022.

Record overseas migration has more than offset interstate migration losses, thereby keeping Victoria’s and Tasmania’s populations growing. However, the impact of migrants on housing is largely seen in the rental market, so this segment of population gain has done little to support values. Growth in weekly rents has been far stronger than growth in home values over the past year, with rents up 9 percent in Melbourne and 4.8 percent in regional Victoria, and up 1 percent in Hobart and 2.7 percent in regional Tasmania.

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Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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