Australia’s population has ballooned by 7.6 million people this century on the back of the federal government’s ‘Big Australia’ immigration policy, the majority of whom have landed in our major cities.
Australia’s population is officially projected to swell by around 40 million people (50%) over the next 40 years, driven by permanently high net overseas migration of 235,000 people a year.
The inevitable consequence of this growth has been a rapid shift away from detached housing to apartment living, especially in Australia’s largest and built-out cities (e.g. Sydney and Melbourne).
Indeed, modelling released after the 2016 Census by the Urban Taskforce projected that Sydney’s housing composition would change dramatically over the 41 years to 2057:
In 2016, 55% of Sydneysiders lived in a detached house. But this is projected to fall to only 25% in 2057, whereas the share of Sydneysiders living in apartments will jump from 25% to 50% over the same period.
That is the death of the Australian backyard right there.
Not surprisingly, the overwhelming majority of Australians would prefer to live in a detached house with a backyard than a townhouse or apartment, if given the choice.
A poll undertaken by Westpac during the pandemic showed that 77% of Australian yearn for a house with a backyard.
Last week, data from CoreLogic showed that the price gap between houses and apartments has blown out as detached houses become more scared:
“So much of the value of detached houses has been tied to a shift in cultural, structural trends since the pandemic transformed the way that we work”, said Eliza Owen, head of Australian research.
“Long term, this seems to be a trend that isn’t going anywhere.”
According to Owen, the price disparities are wider in larger cities.
The premium on detached houses in Sydney was 35% prior to COVID and has recently climbed to 67%.
Melbourne’s premium was approximately 37% prior to the pandemic and is now 54.6%.
“It is another aspect of inequality in our housing market because the detached house and land is going to accrue more value than units over time”, Owen said.
Westpac senior economist Matthew Hassan said that concerns around apartment build quality and flammable cladding has also played a role in the distaste for apartments.
The federal government’s mass immigration policy will ensure that Australians face a future whereby only the wealthy will be able to afford to live in a detached house.
Is this the future we want for our children?
