Demand outstrips supply
Australians’ desire to live in capital cities, especially on the eastern coast of the country, has resulted in some of the highest population concentrations in the world. The continued population growth into our highly sought after capital cities, particularly in inner city and education precincts with the arrival of international students, has driven up the cost of land – notably, from $861 per sq m in Melbourne in 2012, to $1811 per sq m in 2022^.
Additionally, the average number of people living in a household has steadily declined from around 2.9 in the mid-1980s, to around 2.5 since the early 2000s#. This decline was exacerbated in a post-pandemic Melbourne, where people sought additional space of their own. Fewer individuals living in the same household means more property is required to house the population.
These factors are contributing to the core central issue: that demand is outstripping the supply of homes to either rent or buy.
Australian average household size