Supply of homes in Australia not keeping up with demand
There are not enough homes to meet supply in Australia’s most popular cities and more people are living in the same space, new figures show.
The data from the 2016 Census, published for the first time, show that the number of people living in each dwelling in Sydney and Melbourne has increased to 2.7 compared to 2.6 nationally.
The ownership dynamic is changing too with 10% more people living in a rented home and a corresponding fall in the number of people buying their own home outright or with a mortgage.
The figures also show that the number of households with six or more people has increased by 20% since 2011.
‘These figures show that the housing market, in these cities, continues to be undersupplied and inaccessible to new entrants. Households are increasingly forced from the owner-occupier market to the rental market,’ said Tim Reardon, principal economist of the Housing Industry Association.
‘The demand for housing continues to exceed the supply of housing leading to high prices and more people per dwelling as a consequence of the housing affordability squeeze. Home owners have also been increasingly switching away from single dwellings to apartment living,’ he explained.
He pointed out that the number of people living in medium and high density has housing increased by 32% since the last Census, largely as a consequence of the high cost of land. ‘Any additional constraints on the supply of new housing will exacerbate this trend,’ added Reardon.
The Census data also shows that the cost of servicing the average mortgage has fallen and Reardon said that this is largely due to declining interest rates and also the growth in the share of the market that is renting.
‘Rental costs have increased by 24% in Sydney and 17% in Melbourne, which is in line with income growth. Rental cost increases have slowed in recent years, but are 25% higher than in 2011 nationally,’ Reardon said.
‘Rental prices were growing quickly at the time of the 2011 Census but that rate of growth has slowed in more recent years,’ he added.