Older Australians are increasingly holding on to their family home rather than downsizing to villas or apartments once their children leave, creating an unprecedented squeeze on young families trying to enter the Sydney and Melbourne housing markets, a new report has found.
The projections from the Australian Population Research Institute indicate that by 2022 there will be an extra 110,000 households comprised solely of people over 45 living in Sydney and 162,000 extra in Melbourne, compared with 2012. This large cohort was replacing the relatively small 75-plus group, leaving few home vacancies for young families.
At least half the houses in high-amenity suburbs within 10km of the cities were already occupied by older households, the report said.
Assuming that net overseas migration continued at 240,000 a year, and that Sydney and Melbourne received almost half these migrants, “Sydney will have to add a total of some 308,000 dwellings and Melbourne some 355,000 over the decade 2012 to 2022,” the report found.
Lead author Dr Bob Birrell said it meant the dominant response by urban planners and governments to build high-density apartment dwellings was flawed.
There would be a large increase in the number of single people and couple families over the next decade, he said, but most of this increase would be seen in older, already established households.
“In reality, the greatest need is for new houses that are family-friendly,” Birrell said.
“We have a large number of young residents and migrants who will be having children, and they are looking for family-friendly housing. Everyone wants to live in more affluent, higher-amenity suburbs, but for most that option is almost gone already, and it’s only getting tougher.”
In Sydney the number of couples with children and living in apartments was already double that in Melbourne, he said.
“In Sydney, the capacity for housing growth on the fringe of the city is small, partly because Sydney is geographically constrained, but also because successive state governments have tried to put a boundary on the extent of outer suburbia,” Birrell said.
Those who did move to the fringes of Sydney and Melbourne would have to make do with a semidetached rather than a detached house, the report found.
Other households would delay having children or have fewer children; some would accept they had no choice but to live with their family in a unit or low-rise apartment block; others might move out of Sydney and Melbourne in search of more affordable housing; and migrant numbers to the two cities might also decline, the report concluded.
A professor of urban planning and affordable housing expert from the University of Melbourne, Carolyn Whitzman, said governments were not steering appropriate developments towards suburbs with strong public transport systems and schools.
“In Melbourne there has been a great deal of housing built for young families, but it has not been well-connected to schools, jobs and public transport, and has tended to have very poor open space,” Whitzman said.
“Also, research has shown there is nothing wrong with children growing up in flats, as long as they are medium-density, the children have access to open green spaces and there is social infrastructure around them. We’re not building those developments in inner and middle suburbs where they’re most needed.”
To entice older Australians away from their homes, development would need to be encouraged close to where they were already living, she said.
“They want to stay in the same area they have been living for the past 30 or 40 years,” she said.
On Monday new data revealed the housing market slowed in October, thanks to tighter lending standards, record low rental yields and the big banks raising their interest rates.
Annual growth in Australia’s capital city housing prices slowed to 10.1%, from 11% in September, the data from CoreLogic RP showed.
With only modest gains in Sydney and Melbourne, and falls in Brisbane and Perth, monthly growth came in at just 0.2%.
The comparison with October 2014, when prices posted a much stronger rise of 1%, showed the housing market had lost steam.
In Sydney, the median price of a home unit was above the median house price in all other capital cities.
