When Reserve Bank governor Philip Lowe raised the prospect last week of people co-habiting with more housemates as rents rise, some lambasted him as if it was an aloof prescription.
But Lowe was merely describing what will inevitably happen if more housing isn’t built, amid concerns that fewer cranes are on the horizons. Last Tuesday, new data from the Australian Bureau of Statistics showed a large drop in residential buildings approved for construction.
Apartment construction in particular is at a 10-year low. Unsurprisingly this has contributed to the rental crisis. CoreLogic found recently that the rental price gap between houses and apartments went from $64 a week to $39 a week over the past 12 months.
Australians were building and moving into increasing numbers of apartments before the pandemic, albeit from a low base. But the overall share of detached homes in cities remains very high. And most new homebuyers still want to live in a three-bedroom detached home with parking. They are mostly economising by forgoing yard space, but not so much floor space.
Our apartment aversion is a particular cultural pathology — the Australian dream has long been synonymous with owning a big block with a huge backyard and a garage for multiple large cars. Indeed, the Commonwealth Bank found Australia has the largest average home size in the world.
But the only spaces left for such large blocks are in regional areas and on the outskirts of major cities, entailing long commutes to workplaces and key services. The lack of medium-sized options proximate to job centres just leads to “seagulls to chips” fighting for existing stock, rising prices and ultimately more would-be apartment dwellers cohabiting in lower-rise houses, usually with less space to themselves.
The “bigger is better” mindset can obscure such common compromises. For instance, Guardian Australia’s Amy Remeikis recently tweeted sarcastically that she is “looking forward to cramming more people into the tiny apartments developers built for our cities”, lamenting the lack of space and backyards. She’s not wrong that some inner-city developments, particularly those aimed at foreign students, have been veritable shoeboxes. But the sizes of average Australian apartments are growing, partly in response to new regulations.
Those used to roomy spare bedrooms too often imagine “cramming” when housing is vertical and separated, but don’t notice when it’s horizontal and shared. Yet if we want to give people their own space and privacy, building residences vertically is the realistic means.
I once lived in a three-bedroom share house that housed five people — a couple shared one room and one unlucky guy was squished into a converted office space. Crossing one’s legs in line for our single bathroom was not ideal.
For such share-housers, with a quarter-acre block barely affordable and hours away, the next realistic rung on the housing ladder is renting or buying an apartment. It’s our generation’s Australian dream.
But as apartment prices have risen, more people have been reverting to share housing. Flatmates.com.au welcomed its largest number of new users in May (70,000), up 70% from last year.
Living with housemates can be fun (or at least tolerable) while young, but it’s far from preferable for most over-40s. Yet the largest proportional increase in new flatmates.com.au users in the past 12 months is among those aged 55-64, followed by 65+. Conversely, 18- to 34-year-old users are declining, as fewer move out of their parents’ homes and some move back in.
Some media commentary has patronised such “boomerang kids”, chalking up their homecoming to “the lack of ability for the entire generation to individuate” and empathising with put-out parents. Sure, some needy kids might wrongly expect mum to do their washing again, but it’s hard to empathise with boomers who pulled up the housing ladder after themselves now facing familial inconvenience as a result.
Others have blamed the housing crunch on people spreading out during COVID, with the average number of people each dwelling dropping from 2020-22. The number of share houses accordingly decreased.
Housing think tank Prosper Australia reported that such spreading out lessened some of the rent drops predicted during COVID’s higher people-to-houses ratio. It thus argues we can’t build our way out of the housing crisis, as new builds just encourage more spreading out.
For those stuck in overcrowded share houses, spreading out is highly desirable. Less competition for each housing unit facilitated this during COVID — wouldn’t it be great if this was the case all the time? Whether it translates to lower prices or more diverse living options (or a bit of both), improving the people-to-house ratio reaps rewards. And short of returning to lockdown-era migration levels (undesirable for multiple reasons), the only sustainable way to do so is by building more apartments.
Yet even when building materials cheapen and construction rates bounce back, it remains too difficult to build apartments in the suburbs. NIMBY-ish concerns about street parking, overshadowing and undesirable youngsters disrupting the serenity have made urban densification unduly taxing.
If suburban mums and dads don’t want their adult children disrupting their retirement, or moving to far-flung suburbs where they’ll rarely see their grandkids, they’ll need to accept more apartment buildings rising above their familiar flat landscapes. Onwards is upwards.
Should we accept up not out? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
