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Housing supply or size issue?

We all know Australia’s in the grip of a housing crisis. Property prices keep increasing, there’s not enough stock to go around and the rental vacancy rate is at a record low.

But a new report from Cotality (formerly CoreLogic) indicates it’s not just about supply. Part of the problem actually comes down to house sizes and the fact many properties are being underutilised.

Size versus occupancy

As Cotality explains, there’s a mismatch occurring right across the country. Three and four-bedroom homes dominate the market, but the reality is 61 per cent of households comprise just one or two people.

That’s a lot of bedrooms left vacant at a time when properties are in high demand, so let’s take a deep dive into the data and look at why this might be the case.

The data

The data cited by Cotality comes from the Australian Bureau of Statistics and Cotality’s own datasets and indicates:

  • 30 per cent of Australian households are families with dependants
  • 31 per cent are couple families without dependants
  • 27 per cent are people living alone

Meanwhile, when it comes to house size:

  • 9 per cent of Australia’s housing stock comprises five bedrooms or more
  • 28 per cent of parties are four-bedroom homes
  • 42 per cent of properties are three-bedroom homes
  • 18 per cent are two-bedroom homes
  • 9 per cent are studios or one-bedroom properties

In effect, that means that much of Australia’s housing stock is currently underutilised. The majority of homes contain only one or two residents (58 per cent in total), but the majority of these properties (79 per cent in total are three bedrooms or more.

The move towards larger houses

The Guardian notes Australian houses have more than doubled in size over the past 60 years, increasing from about 100sq m to 232sq m.

Part of that has been the pursuit of the Great Australian Dream – a forever home to call your own.

Along the way there’s been the push towards more lifestyle attributes such as extra living areas, outdoor entertaining spaces, larger bedrooms, spare bedrooms, media rooms and more.

There’s also been the impacts of work from home, with home office areas now common.

So what’s the answer

Cotality notes part of the answer to the mismatch dilemma could lie in downsizing. Of course there’s nothing wrong with having a large house to enjoy, and additional rooms to host family and friends.

But as they explain, there could be reduced costs and greater housing efficiency by encouraging single or couple households who are ready to make the move into smaller housing.

Are you considering downsizing?

If you’re considering downsizing and are seeking to understand the current market conditions, why not chat with one of our friendly agents to understand how we can help?

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