Policymakers are exerting significant pressure on Australians to live in shoebox apartments.
Their directive runs counter to the wishes of Australians, who overwhelmingly prefer to live in detached houses.
The average price premium of a detached house across Australia’s capital cities was 174% in May, according to PropTrack:
Detached houses have also experienced far stronger price appreciation since the beginning of the pandemic.
Since December 2019, detached housing prices at the combined capital city level have risen by 52.4%. This was more than double the 22.1% growth recorded by units.
The rental market has experienced a similar divergence, as illustrated below by Justin Fabo from Antipodean Macro:
As illustrated above, detached houses have experienced far stronger rental growth than units.
Housing Industry Association chief economist Tim Reardon told The Australian that the pandemic fundamentally changed what Australians expected from their home, with households valuing greater space.
“This partly reflects the impact of the pandemic and change in work from home arrangements; people are spending more time at home and are seeking more space as each resident requires their own work from home area”, Reardon said.
The reality is that most Australians would prefer to live in a detached house. Except, affordability constraints have forced many to compromise and live in apartments instead.
Consider Infrastructure Victoria’s Our Home Choices report, which provided the following information about housing preferences:
Most households strongly prefer detached houses over apartments (see Figure 5), particularly those who are looking to buy a home.
Location, the number of bedrooms, and the number of car spaces also factor into housing decisions, but tend to be less important than the type of home.
Faced with prevailing prices and budget constraints, over two-thirds of households (68%) would choose to live in a detached house if they had to move, compared with 14% for townhouses and 18% for apartments.
A survey by Westpac undertaken over the pandemic showed that 77% of Australians would rather live in a detached house with a backyard than in a townhouse or apartment.
The truth is that Australians do not want to live in high-rise shoeboxes. However, the federal government’s mass immigration policy, which is driving densification and the expansion of our major cities, is forcing them to do so.
The Big Australia mass immigration policy will ensure that only the wealthy can afford to live in a detached house in the major cities.
It also represents the death of the Australian backyard.
