9 Facts About Our Property Markets You Should Know


By Michael Yardney 

Since you're reading my blog, it's pretty safe to assume you've got an interest in real estate or property investing.

So today I'd like to share 9 interesting facts about the Australian housing market:
1. It's Big

According to Corelogic there are approximately 9,000,000 dwellings in Australia with a total value of around $6.2 trillion.

And residential real estate accounts for more than half of all household wealth.

2. Most of us are homeowners
The 2011 Census found that 67% of households own their own home or are purchasing it through a mortgage - most of the rest are renters.

And despite claims of unaffordability, the proportion of home ownership has been fairly stable for more than fifty years, after rising from 53 per cent in 1947 to 63% per cent in 1954 and hitting 70% in 1961.

3. Not surprisingly the level of home ownership increases with age:

  • The younger generation (under 24 years of age) tend to rent - only 22 per cent own or are buying a home.
  • For those aged between 25 and 34, it's pretty much 50-50 between owners and renters; and...
  • By the age of 75 close to 85 per cent of people own their home outright, less than 3 per cent have a mortgage and less than 10 per cent are renting.

4. Our homes are getting bigger
The Great Australian Dream of huge houses with extra bedrooms, a study, media or family room may be coming to an end, but our homes are still the biggest in the world.

While more of us are slowly swapping backyards for balconies, new homes in Australia are, on average, bigger than anywhere else in the world at 245 square metres for new freestanding homes and 215 square metres for new homes overall - up around 10% in a decade.

However, with the proportion of new apartments and townhouses being built relative to new detached houses increasing, the size of the average Australian dwelling is likely to decrease.

Most houses have a spare room or two - in 1976 there were 3.1 people per household in Australia, that has since fallen to around 2.6.

In the same period, the proportion of dwellings with four or more bedrooms has risen from 17% to 31% and the average number of bedrooms per dwelling has increased from 2.8 to 3.1.

 5. Our homes are getting more expensive
Over the last 10 years home prices around Australia rose by an average of 5.7% - hardly property bubble material as some doomsayers are suggesting.

As you can see from the following Corelogic graphics, the Melbourne and Sydney property markets were the star performers over the last year.

6. Our house price growth is tame compared to some overseas markets.

Sure property prices have been soaring in Sydney and Melbourne, but Australia’s house price growth looks tame compared with some overseas property markets, as can be seen in the following chart of annual house price growth to March 2015.

7. Housing is becoming less affordable
Housing affordability remains an issue for policy makers and those trying to enter the market.

Of course it depends who you ask –those who own properties, especially in Sydney and Melbourne are enjoying increased wealth as the value of their homes increase.

And it depends how you measure it.

One way to assess house prices over time is to compare them to income.

In 1981-82 the median after tax household income was around $15,000 while the median dwelling price was $48,000. That works out as a price-to-income ratio of close to three, or in other words in 1981-82 it took a little over three years' take-home pay to buy a house.

Nationally that ratio has now passed six, or more than twice as much, and in places like Sydney it went above nine during the property boom of the early 2000s.

However what is not taken into account when looking at it this way is that the cost of housing – in other words interest rates - have fallen considerably and the cost of owning a house as a proportion of disposable income hasn't risen substantially over time - see graph 2 below.
8. Renters are worse off
Interestingly the Australian Bureau of Statistics found that, over the last 20 years, the cost of renting has increased more than the cost of owning a home.

The graph below shows that between 1994–95 and 2013–14, private renters experienced a 62% (or $144) increase in average weekly housing costs, after adjustment for inflation.

During the same period there has been an overall increase of 42% (or $135) for home owners with a mortgage and 45% (or $46) for public renters.

In March 2015, an average of 31.5 per cent of income was spent on home loan repayments, while renters paid an average of 24.8 per cent of their income.

While in dollar terms people with mortgages spend the most per week on housing at around $408, that represents only 18 per cent of their income. Renters spend an average of $275 but that's a higher proportion of their income at 20 per cent.

9. 0.5% of our population are homeless
According to Homelessness Australia there are currently 105,237 people in Australia who are homeless.

Sixty per cent of homeless people are aged under 35, and one quarter are Indigenous Australians.

So there you have it – 9 interesting facts about our housing markets.


Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He’s been voted Australia’s leading property investment adviser and his opinions are regularly featured in the media. Subscribe to his blog at Property Update

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