Australia Takes Steps Towards Affordable Living

The Reserve Bank of Australia recognizes the profound influence of the pandemic on housing demand. As a result of smaller household sizes during COVID-19, there is a pressing need for more homes. The central bank's research reveals that for each 1% decline in average household size, approximately 120,000 additional households require housing. This shift has played a significant role in exacerbating the existing housing crisis in Australia.

The housing crisis has extended beyond the affordability challenges faced by first-time homebuyers and young families. It has escalated into a severe rental emergency, where only four out of 45,895 rental listings across the country are considered affordable for individuals receiving JobSeeker assistance. The combination of decreasing household sizes and limited affordable rental options has further strained the already strained housing market in Australia. Urgent measures are needed to address this crisis and ensure accessible housing for all segments of the population.

Australia's housing demand is being shaped by two key factors. Firstly, the ageing population has resulted in a rise in older single individuals, leading to smaller average household sizes. Secondly, migration plays a role in increasing housing demand, with projections indicating a significant shortfall of homes in the coming years.

The National Housing Finance and Investment Corporation predicts a growing gap of homes, which could reach 106,300 by 2027. However, if migration numbers exceed expectations, the deficit could be even larger, potentially reaching 175,000 homes. Developers have already started adapting to these changes, with some buyers choosing to look for homes further out from traditional suburban areas, seeking larger living spaces due to remote work opportunities.

These demographic shifts and the impact of migration are transforming the housing landscape in Australia, prompting developers to respond to evolving preferences and needs.

Source: https://www.afr.com/property/residential/the-reasons-for-the-housing-crisis-go-way-beyond-migration-20230511-p5d7q7