Speech: Housing in the endemic phase

Luci Ellis^[*]
Assistant Governor (Economic)

Keynote Speech to the UDIA 2022 National Congress
Sydney – 25 May 2022

It is no surprise that the pandemic has changed how we think about our homes. There is nothing quite like being confined to your home for months on end to make you appreciate having a home that meets your needs, or rankle at one that does not. Spurred by the experience of lockdown and self-isolation, many people understandably wanted a bit more space, and perhaps a garden. Some also needed space where they could work, or perhaps just fewer flatmates to share that space with.

This shift towards wanting more space has changed many people’s living arrangements – the full extent to which will be revealed in the 2021 Census results to be released from late June. Until then, there are some intriguing and suggestive results from survey data, which show that average household size has fallen since the pandemic began (Graph 1). The share of group households declined in 2020 and has remained at this lower level. By contrast, while some young adults moved back in with their parents at the onset of the pandemic, that shift has since reversed. On the question of who you would rather be locked down with, at least some Australians have voted with their removalists’ van, by moving out of their share house and in with their partner.

The decline in average household size increased the demand for homes (by number). This helps explain why rental vacancy rates quickly returned to low levels even though the international border was closed and population growth declined to be close to zero.

Roughly speaking, the decline in population growth meant that there were up to 200,000 households that didn’t arrive in Australia over the past two years, who would have done so if population growth had stayed where it was before the pandemic.^[1] But the decline in the average size of households that were already here broadly offset this. Across the whole Australian population of more than 25 million people, a decline in average household size of the extent shown in Graph 1 would add about 140,000 households. This is a necessarily rough calculation and, as I mentioned, we will know more when the Census results are released. In broad terms, though, these two factors have roughly offset each other. This suggests that the number of homes demanded didn’t changed much throughout the pandemic.

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