Business Environment Profiles - Australia
Published: 12 September 2024
Number of households
11 Million
1.8 %
This report analyses the number of households in Australia. The ABS defines a household as residing in one dwelling, regarding themselves as a household, and making common provisions for food or other essentials for living. Households include group households of unrelated people, same-sex couple households, single-parent households, as well as one-person households, couples and traditional families. Households do not include people who usually live in non-private dwellings, such as hotels, boarding houses, jails and hospitals. The data for this report is sourced from the ABS and measured in financial years.
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IBISWorld expects the number of households to increase by 1.8% during 2024-25, to 10.71 million. This rate of growth indicates that household growth has recovered from the pandemic-led disruptions to household growth. The key driver to household growth is the surge in net migration, which has boomed since the Australian Government reopened Australia's international border in February 2022. Yet, surging net migration is also constraining housing supply, leading to record-low vacancy rates in many major cities and steep growth in rental prices. Although growth in rental prices is set to ease over 2024-25, prices will remain elevated, slowing an otherwise strong growth in households.
Over the past decade, rising demand for inner-city living and increased urbanisation have fuelled multi-unit apartment construction activity, which has driven a trend towards smaller property sizes. Although property sizes have declined, the number of people per household has remained largely stable. The pandemic added further volatility to the housing supply, especially after the Australian Government closed the international border and net migration collapsed. The average household size got smaller, particularly as rental prices collapsed in major cities with very low migration and now international students. Many Australians who lived in shared houses moved out on their own during the pandemic, which further reduced the average size of households. As borders reopened in 2022 and migration recovered, these trends have put significant pressure on the housing supply, which slowed household growth.
The most common living arrangement for people in Australia is in a family household. Family households have remained steady as a share of total households over the past few years, oscillating between 71% and 69% over the past decade. The number of group households and people living alone has trended upward since 1996. Slower growth in the number of marriages than the Australian population has contributed to this trend, with unmarried couples less likely to live together than married couples. A rise in life expectancy and an aging population have also fed into this long-term trend because the likelihood of living alone increases with age, oftentimes reflecting the death of partners at this age.
IBISWorld forecasts the number of households to grow at a compound annual rate of 1.8% over the five years through 2024-25. Increased multi-unit apartment construction activity over the past decade has fuelled the trend towards smaller household sizes, boosting total household formation. However, this has been offset by a rise in the proportion of households hosting three or more people, and a sharp increase in rental prices inducing more people to stay in shared households. The trend of children living with their parents later into adulthood has also slowed household growth, as rapid asset price inflation and the surging cost of rent have precluded Australians from buying a home or moving into a rental.
IBISWorld forecasts the number of households to reach 10.90 million in 2025-26, a 1.8% increase o...
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