Why living 80s style would mean we'd need 1.2 million fewer homes

The Reserve Bank assistant governor says how we live now is contributing to the housing shortage.

The National Housing Accord announced by the Albanese Government aims to build 1.2 million new well located homes over the next five years, starting from 1 July. The Accord is an agreement between the Federal Government and the states and territories to work together to raise the supply of homes. It begins with $3.5 billion in federal funding and the states and territories undertaking expedited zoning, planning and land releases to facilitate new building.

All of this is happening amid a housing crisis that has seen rents and home values both skyrocket by more than 40 percent since August 2020, according to CoreLogic data. Demand for social housing is also high, while post pandemic immigration has put further pressure on the market, and dwelling approvals per capita are at decade-lows amid high interest rates and higher materials and labour costs.

But there’s another way to fix it, says RBA assistant governor Sarah Hunter. We could just go back to living like we did in the 1980s. Back then, households were larger in size. That is, the number of people per household was higher at 2.8 people per home compared to 2.5 now. That may not sound like much of a difference, but Ms Hunter says if we reverted to this we’d need 1.2 million fewer homes right now.

In a speech last week on housing market cycles and fundamentals, Ms Hunter said that underlying demand for housing – be it rental or ownership – is determined by the size of our population, currently 27 million, and the average number of people living in each of our 11 million homes.

Ms Hunter said Australia typically has faster population growth than other advanced countries, driven by net overseas migration. In FY23, new overseas migration totalled more than half a million people. She also said the size of Australian households has been trending lower over the long term, mainly due to demographic factors. These include an ageing population, which means we have more elderly Australians living alone or in couple-only households; as well as a falling birth rate, which is reducing the average family size.

While the demographic trends that drive housing demand tend to occur slowly, the pandemic sped them up. “During the pandemic, there was a shift in preferences towards more physical living space per person ... This was particularly the case for people who shared a home with non-family members, such as young people living in a flat share,” Ms Hunter said. “This group shrank as a proportion of households, while the share living with their partner increased – as a result, the average household size declined.”

She added: “The shift to working from home has also reinforced this change. While some people have returned to their workplace full time, there has been an increase in the proportion of people working from home – for many, a home office space is now highly desirable. This suggests that the recent falls in the average number of people per home will be at least partially permanent.”

When housing demand rises, supply usually responds through new building activity. But the time this takes can vary, depending on rental and housing prices, underlying construction costs and the time required to design, approve and build. In the meantime, property prices and rents adjust in line with the extent of the demand and supply imbalance.

“The pandemic period – and its aftermath – stands out as a particularly sharp cycle,” Ms Hunter said. Growth in demand for new dwellings slowed rapidly in 2020 before rebounding strongly, partly due to the HomeBuilder program. But supply did not respond normally, with completions trending lower over the past five years due to a “perfect storm” of challenges in the construction sector.

They began with COVID-related supply chain disruptions that made it difficult to source materials, fixtures and fittings. Materials and labour costs went up, and a combination of shipping delays and labour shortages significantly extended building timelines. Today, supply chains have normalised but costs remain nearly 40% higher than in 2019 and the pipeline of new builds is clogged.

Additionally, major new projects are typically funded by debt, so higher interest rates are also reducing the viability of new builds. Many developers have delayed projects because of higher costs relative to anticipated returns. Meriton founder Harry Triguboff recently told The Australian that government and council approvals take too long and “it is harder to sell apartments now than ever before” due to high interest rates and fewer Chinese buyers.

Ms Hunter said easing zoning and planning restrictions and streamlining approval processes could reduce costs and lift supply but “it will not be a quick fix”. She concluded: “… upward pressure on rents and prices will remain until new supply comes online”.

For Jack Freeman, a compelling interior should not look as though it was completed in a single shopping trip.

The founder and designer behind FREEMAN & CO prefers rooms that develop through art, travel, commissioned furniture and objects collected over time. It is an approach that treats the home less as a decorative project and more as an evolving portrait of its owner.

“I am a true believer in collecting versus decorating,” Freeman says.

That distinction underpins the international practice he has built across private residences, hotels, property developments, yachts and private aviation. Its projects stretch from Point Piper, Vaucluse, Circular Quay and Toorak to Mayfair, Bel Air and the Caribbean.

Although the locations and architecture vary considerably, the work is connected by a restrained design language. Natural stone, warm timbers and sculptural furniture establish the foundation, while art, bespoke lighting and individual objects give each interior its identity.

The objective is not to overwhelm a room with obvious symbols of expense. It is to create an environment that feels calm, layered and particular to the people living within it.

“The greatest luxury isn’t about excess,” Freeman says. “It’s about creating an oasis where you come home and feel immediately grounded — effortlessly chic and deeply personal.”

Collecting instead of decorating

Decorating can imply the completion of a room: selecting the required furniture, filling the available walls and producing a coherent finished image.

Collecting is less conclusive.

A collected interior has room to change as its owners travel, discover artists, inherit pieces or reassess how they use their home. Its character comes from the relationship between objects rather than adherence to a single brand or season.

That does not mean placing unrelated pieces together without discipline. The designer must understand scale, proportion, material and provenance well enough to create a dialogue between them.

A contemporary artwork might sit beside a historic piece of furniture. A precisely detailed new interior may be interrupted by an irregular object made by hand. Smooth stone can be balanced by timber, textiles or a patinated metal surface that becomes richer with age.

The tension between those elements is part of the appeal.

For Freeman, art is not an accessory to be added once the furniture plan is complete. It forms part of the architecture and atmosphere of the room from the beginning.

Lighting is considered in the same way. Beyond its practical purpose, a bespoke fitting can operate as a suspended sculpture, changing both the room’s composition and the way its materials are experienced after dark.

A design perspective shaped by travel

International travel plays a significant role in Freeman’s creative process.

Design fairs such as PAD Paris and Salone del Mobile in Milan provide opportunities to encounter emerging designers, established galleries, new materials and collectible furniture away from the filter of social media.

More spontaneous discoveries can prove equally important.

“Sometimes it’s the simple things,” Freeman says. “That piece found on a shopping trip with a client in Paris, stumbling across an artisan’s workshop, or a special memory that forms the narrative of the story.”

Objects selected during travel bring more than visual interest into a home. They carry an association with a place, maker or experience, giving the client a connection that cannot be reproduced by ordering an entire interior from a catalogue.

Freeman’s influences are international, but his projects are not conceived as replicas of Parisian, Milanese or Californian style. Each commission responds to its architecture, setting, natural light and the daily lives of its occupants.

A waterfront Sydney residence demands a different treatment from a Mayfair townhouse. A Caribbean estate shaped by brutalist architecture and reflecting pools calls for another response again.

The designer’s role is to absorb those references without allowing them to overwhelm the individual qualities of the property.

Designing the complete experience

FREEMAN & CO extends beyond conventional interior decoration.

The practice’s stated services include interior design and architecture, project management, property acquisition, development advice, concept design, documentation, furniture and lighting design, procurement and art curation.

That breadth allows the team to become involved before a room’s dimensions and finishes are fixed.

Early participation can be important at the top end of the residential market, where architecture, landscape, interiors, technology and art must operate as one environment. Decisions about ceiling heights, wall dimensions, sightlines and lighting can directly affect where art is installed or how custom furniture is proportioned.

The practice can then carry those decisions through to procurement and final installation, maintaining the design narrative as a project moves between architects, builders, specialist craftspeople, dealers and suppliers.

Its residential portfolio includes a South Coast retreat conceived as an escape from urban life, a Caribbean estate with reflecting pools, an East Coast-inspired Palm Beach residence and a Mayfair townhouse organised around an expressive drawing room.

The studio also says it has worked on highly tailored Sydney residences with values exceeding $100 million, although the private nature of such commissions means individual addresses and clients are not always disclosed.

A home that can keep changing

The risk in creating a perfectly resolved interior is that it can become too static — a composition that looks exceptional in photographs but leaves little room for life.

Freeman sees the home as something that should evolve with its owners.

“I love the evolution of design,” he says. “We are talking about people’s lives, and as they evolve, so too should their private sanctuaries.”

That evolution might involve adding art, reupholstering a significant piece, adapting rooms as a family changes or making space for objects gathered through future travels.

The original design needs to be strong enough to accommodate those layers.

This may be the clearest expression of Freeman’s approach to luxury. It is not simply access to rare stone, collectible furniture or commissioned craftsmanship. It is the creation of a personal environment whose meaning deepens rather than diminishes with time.

Fact box

Designer: Jack Freeman

Role: Founder and managing director

Practice: FREEMAN & CO

Base: Australia, with international projects

Project locations named by the practice: Point Piper, Vaucluse, Circular Quay, Toorak, Palm Beach, the NSW South Coast, Mayfair, Bel Air and the Caribbean

Sectors: Private residences, hotels, residential developments, private aviation and superyachts

Services: Interior design and architecture, property development, project management, property acquisition, documentation, furniture and lighting design, FF&E procurement, interior dressing and art curation

Design philosophy: Collected, personal interiors shaped by art, craftsmanship, travel and enduring materials

Website: free-man.co

Why living 80s style would mean we’d need 1.2 million fewer homes

The housing crisis could be addressed without the need for more dwellings, the RBA assistant governor says

Jack Freeman believes the most compelling interiors are not decorated, but collected. The FREEMAN & CO founder creates layered, personal spaces shaped by art, travel and craftsmanship.