Leslie Massey
Household sizes in Australia are changing significantly. The average household size has shrunk from 2.6 people in 2016 to 2.5 people in 2021, with the most common household size being two persons per household. The size of households generally follows the life cycle of families, increasing with the advent of children and decreasing when children leave home. Household size can also be influenced by a lack of affordable housing, with young people living at home for longer. Other factors include an aging population, falling fertility and marriage rates, and higher household incomes.
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What You'll Learn
Household size trends
Household sizes in Australia have been undergoing significant changes in recent years. The average household size in Australia has generally been shrinking since the 1970s, with the rate of decline slowing down in recent years. In 1911, the average number of people per household was 4.5. By 2016, this number had dropped to 2.6, and in 2021, it decreased further to 2.5 people per household.
The shift in household composition, with an increase in young couples without children, has contributed to the smaller family sizes observed in recent years. Additionally, divorce and separation rates in Australia have risen since the COVID-19 pandemic, which may also influence household sizes. During 2020 and 2021, there was a notable surge in divorce filings, with an 8% increase compared to the previous year.
The size of households typically corresponds with the life cycle of families. Households tend to be smaller when couples first marry, expand with the arrival of children, and then contract again as these children reach adulthood and move out. Household size can also be influenced by factors such as affordable housing availability, birth rates, and cultural traditions. For example, overseas migrants and Indigenous persons often live with extended family members, resulting in larger households.
The COVID-19 pandemic also had a notable impact on household sizes in Australia. Between February and September 2020, during the lockdown period, household sizes grew by around 2%. This increase reflected compositional changes, with a larger number of young adults moving back in with their families.
Looking ahead, the outlook for average household size in Australia is uncertain. While there has been a slight increase in average household size since the end of 2022, potentially due to tighter rental markets, long-term structural factors such as an aging population, falling fertility and marriage rates, and higher household incomes continue to influence the formation of smaller households. By 2046, the average household size in Australia is projected to be between 2.4 and 2.6 people.
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Family structure
Several factors contribute to the shrinking family size in Australia. One factor is the increase in young couples without children, as divorce and separation rates have risen since the COVID-19 pandemic. During 2020 and 2021, there was an 8% increase in divorce filings compared to the previous year, which may be attributed to heightened stress, financial strains, and changes in lifestyle dynamics due to lockdowns and restrictions. Additionally, there is a trend towards smaller family sizes, with couples choosing to have fewer children. In 1976, couple families with children made up nearly half of all families (48%), but by 2016, this had decreased to a third of families (37%).
The proportion of one-person households in Australia has climbed over the past four decades, increasing from 19% in 1986 to 24% in 2016. This trend may be influenced by various factors such as a lack of affordable housing, an increase in the birth rate, or changes in family formation dynamics. For example, during the early stages of the COVID-19 pandemic, household sizes temporarily grew by around 2% as many young adults moved back in with their families.
Extended family households, which include couple or one-parent families living with other relatives, made up 8.3% of households in 2016. These extended family households are more commonly found among Indigenous households and some immigrant households. The concept of a "family" in Australia is defined as two or more related people living in the same household, including couples with or without children, single parents, and siblings living together. In June 2024, there were 7.6 million families in Australia, with 82% being couple families, 16% being one-parent families, and the remaining 2% classified as "other families."
The changing family structure in Australia has had notable impacts on the property market. With older individuals choosing to remain in their larger homes, there is increased competition for properties suitable for families. This has led to a shortage of family housing options and a shift in preferences towards smaller, more manageable homes that offer greater efficiency in space utilization.
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Housing demand
Demographic factors play a significant role in shaping housing demand. The size and composition of households can vary depending on factors such as family structure, age, and life-cycle stage. For example, households with children tend to be larger, while single-person households are more common among younger and older adults. The average household size in Australia has generally declined since the 1970s, with the proportion of lone-person households increasing over time. However, the rate of decline has slowed in recent years, and the average household size remains around 2.6 people. Additionally, the proportion of one-parent families has remained relatively stable at 12% between 2001 and 2021, while the Northern Territory has the highest proportion of family households.
Market conditions, such as supply and demand dynamics, economic indicators, and consumer preferences, also influence housing demand. An increase in the number of households in an area may indicate a lack of affordable housing, leading to shared living arrangements or an increase in birth rates. Conversely, a decrease in household size could be due to children moving out or a rise in retirees in the area. Consumer preferences, such as the growing desire for sustainable and energy-efficient housing, can also shape housing demand.
Government policies and regulations can significantly impact housing demand and affordability. Tax incentives, such as mortgage interest deductions and property tax deductions, can encourage homeownership by reducing the tax burden. Housing assistance programs, including rental assistance and homeownership assistance, can help individuals and families access affordable housing. Zoning laws and building codes influence the type, location, and density of development, impacting the supply of housing. For example, restrictive zoning that prioritizes single-family homes can limit the development of multi-family housing, affecting housing affordability.
The relationship between housing supply and demand is complex and varies across regions. While Australia experienced an overall oversupply of dwellings between 2001 and 2017, there are significant regional differences. Inner-city areas of major capitals, such as Brisbane, Melbourne, and Sydney, have a surplus of housing due to strong growth in unit developments. In contrast, many regions in the middle and outer rings of these cities face modest housing shortages, contributing to higher house price growth.
To summarize, housing demand in Australia is influenced by a combination of demographic changes, market conditions, and government policies. As the population grows and household compositions evolve, the demand for different types of housing, such as age-restricted or sustainable homes, will continue to shape the market. Addressing housing affordability through policies and assistance programs remains crucial, particularly in regions facing housing shortages.
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Lone-person households
The rate of growth in one-person households in Australia has slowed in recent years, with a decline of -0.4% since 2001. This is in contrast to other countries, such as South Korea, where the growth rate of one-person households was around 30-50% in the decade from 2000-2010. However, it is similar to patterns observed in New Zealand (-1%), Switzerland (+1%), and the UK (+1%).
Marital status and age play a role in living alone. Among younger people, living alone is associated with delays in marriage, while in middle-aged groups, it often results from separation or divorce. Among older people, living alone is often due to the death of a partner. In 2011, 24% of Australian-born people aged 60 or over lived alone, compared to 14% of Greek-born and 11% of Chinese-born older Australians.
The size of households generally follows the life cycle of families. Households are typically smaller during early marriage and expand with the arrival of children. As children become adults, they often leave home, resulting in a decrease in household size. Other factors influencing household size include affordable housing availability, birth rates, and family formation in the area.
Looking ahead, it is projected that lone-person households will constitute 26% to 28% of all Australian households in 2046. This represents a notable increase from the 2021 figures.
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Average household size in 2024
Household sizes in Australia have been shrinking over the years, and this trend is expected to continue in 2024. As of June 2024, the average household size in Australia was 2.5 people, a decrease from 2.6 people in June 2014. This decline in average household size is attributed to various factors, including changing demographics, divorce and separation rates, housing preferences, and the impact of the COVID-19 pandemic.
The proportion of one-person households in Australia has been climbing over the past four decades, with an increase from 19% in 1986 to 24% in 2016. In 2021, 26% of households in Australia contained only one person, and this trend is likely to continue in 2024. Several factors contribute to the rise in one-person households, including an aging population, falling fertility and marriage rates, and higher household incomes. Additionally, during the COVID-19 pandemic, there was a surge in divorce filings, with an 8% increase in 2020-2021 compared to the previous year, which may have led to smaller household sizes.
The composition of households is also evolving, with a growing number of young couples without children, contributing to smaller family sizes. In June 2024, 57.2% of couple families were without dependants. Additionally, the demand for family housing is impacted by older Australians' reluctance to downsize, leading to increased competition for properties suitable for families. This results in an imbalance between supply and demand, influencing buyer choices and investment decisions.
While the average household size in Australia is projected to be 2.5 people in 2024, it's important to consider regional variations. For example, the Northern Territory has a lower proportion of lone-person households and a higher proportion of family households. Additionally, the size of households can be influenced by factors such as affordable housing, birth rates, and cultural preferences for living arrangements, such as those of overseas migrants and indigenous persons.
Looking ahead to 2046, the Australian Bureau of Statistics projects that the average household size will range between 2.4 and 2.6 people. This projection takes into account the expected growth in the Australian population, which is estimated to reach 33.9 million people by 2046.
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Frequently asked questions
The average family size in Australia has been declining over the years. In 2024, the average household size was 2.5 people, down from 2.6 people in 2014. In 2021, the average household size was 2.5 people, a decrease from 2.6 people in 2016. In 2016, families made up 71% of Australia's households, compared to 77% in 1986.
The average number of people per household in Australia has decreased over time. In 1911, the average number of people per household was 4.5. By 2016, this number had fallen to 2.6. The proportion of one-person households in Australia has also climbed over the past 40 years, increasing from 19% in 1986 to 24% in 2016.
The size of households in Australia can be influenced by various factors, including the life cycle of families, affordable housing, and cultural factors. Households are typically smaller when couples first marry and expand when they have children. As children reach adulthood and leave home, household sizes decrease again. A lack of affordable housing can also lead to larger household sizes, as individuals may choose to live with their families or share accommodations. Additionally, cultural factors such as traditions of living with extended family members among Indigenous and immigrant communities can impact household sizes.
