The 2021 Census has revealed over 10 percent of Australia’s housing supply is unoccupied, with more rightsizing opportunities now on offer for older families and couples compared to the previous Census thanks to declining average household sizes. 

The Census has also outlined the need to create further affordable housing dwellings is now at a crucial point. PowerHousing Australia CEO Nicholas Proud says the lack of affordable housing extends to a lack of affordable rentals which is hurting the property market.

“The Census highlights the need to create affordable housing supply, particularly rental housing that is rightsized to Australia’s changing demographics. Whilst there has been a decline in unoccupied housing, the Census showed that 10.12 percent of houses were unoccupied which is still too high with more than 1 million properties left vacant on census night.

“The proportion of unoccupied dwellings was closer to 9 percent in the mid-90s/early-2000s. With rising rents, ultralow vacancy rates and worrying trends in homelessness, governments need to examine ways to bring some of this underutilised housing stock online.

“Inline with previous census results, Australia’s homeownership rate continues to stall. The homeownership rate in 2021 sat at 65.93 percent, which is higher than the 65.43 percent in 2016, but is still below the 66.22 percent in 2001. This is despite the generous first-home buyers and home builder grants, activated in the wake of the COVID-19 pandemic, which drove a record amount of first-home buyer activity in the beginning of 2021.

“Declining household size is part of a broader trend as the Australian population ages and couples form families later in life. The Census identified that household size has declined by 0.053 per household in the past 5 years, from 2.594 people per household in 2016 to 2.541 in 2021. Although this change seems small, the decline in household size is enough to drive demand for just under 200,000 dwellings needed over the past 5-years to meet this dispersion.

“There is clearly a strong demand for new housing, but Australian housing construction also seems out of step with the reality of the needs of Australians. The Census reveals that 3 person and larger households have declined as a proportion of households. Couples have remained steady whilst single person households have notably increased, from 24.42 percent of households in 2016 to 25.56 percent of households in 2021.

“Yet, Australia’s houses are not geared to facilitate this increasing number of single person households. The proportion of houses with 4 or more bedrooms increased from 32.23 percent in 2016 to 34.76 percent in 2021. To put a finer point on the issue, the number of single bedroom dwellings increased by 77,429 over the past 5-years (411,252 in 2016 to 488,681 in 2021). This compares to the number of single person households increasing by 347,205 over the past 5-years (2,023,537 in 2016 to 2,370,742 in 2021). When there are so many people facing rental stress and homelessness, there is clearly a need to re-examine the types of housing being built.

“An increasing number of Australians are also now renters rather than homebuyers, sitting at 30.64 percent of the population or a total or 2.8 million people. Yet, the Australian housing market isn’t geared to create affordable and secure rental housing supply. The Census identified national median rents increasing by only $35 from $340 to $375 per week. This reflects a 10 percent increase in rents over the past 5 years. 

The statistics do not account for large rent increases since August last year, as well as housing stress in regional areas.

“There is clearly a mismatch between the housing system that exists currently and the expectations and needs of the community. The Census highlights the opportunities to right size existing housing supply, gear new housing construction toward smaller households and bring unoccupied housing online to alleviate Australia’s housing crisis,” says Proud.

“Further examination of the Census data will reveal important insights in the coming days.”