5.5 people living inside a 35m²
In the late 1800’s we had approximately 5.5 people living in a 35m² home
3.5 people living inside a 85m²
In the mid-1900’s we had 3.5 people living in 85m².
2.3 people living inside a 246m²
Today, we have 2.3 people living in a massive 246m².
Australia has the largest homes in the world, with a reducing number of people who live in them.
If you were to take the mindset of a property developer, the return on the investment per square metre simply isn’t viable
To put this into context, if you had 246m2 in Hong Kong, you would be able to fit just over 22 homes for the same space here in Australia. Using that same logic, a home of 246m2 could fit 55 people inside it.
Looking at the reliability of a family as a tenant, the average time span of in a standard family home is 6-12 months whereas someone who is single or a couple is 2 years. As a result of the oversupply of family homes, families have more choice whereas someone on their own stay longer because they know their options are limited. There is a massive undersupply of affordable dwellings designed to cater for single people.
Living in a residential house
People living in an apartment
Housing Affordability is decreasing
People living on their own spend on average 44.4% of their income on housing. The Australian benchmark for when living becomes unaffordable is when housing costs exceed 30% of an individual’s income. Projections show that people living on their own will make up 24% to 27% of all Australian households in 2041 (compared to 25% in 2016) and increase by between 0.7 and 1.2 million (32% to 53%) from 2016 to 2041.
When looking at the average rent of a 4 bedroom home as per the Department of Health & Human Services Rental Report, we see it costs $420, whereas avg price of 2bed home is $415. Therefore each extra bedroom is worth $2.50 per week, on average.
This begs the question – why do the majority of investors keep building 4 bedroom homes? The return is simply not viable.
Social Isolation and Loneliness
Social isolation and loneliness vary across age groups. Loneliness tends to be more common in young adults, males, those living alone, and those with children, either singly or in a couple (Baker 2012). The Australian property market is catered and modelled for the majority around families – the least likely group to experience social isolation and loneliness.
- 1 in 10 (9.5%, or around 1.8 million based on 2016 population) Australians aged 15 and over report lacking social support (Relationships Australia 2018)
- about 1 in 4 report they are currently experiencing an episode of loneliness (Australian Psychological Society 2018)
- 1 in 2 (51%) report they feel lonely for at least 1 day each week (Australian Psychological Society 2018).
For people who live on their own, very little housing options allow for social connections that produce positive outcomes.
For further information, please speak with your Austwide Invest accredited Consultant.