Covid-19 shrank household size, lifted prices


Australia’s shrinking household size accelerated during the Covid-19 pandemic, sending property prices and property rental prices skywards as dwelling supply struggled to keep up with the booming demand.

The most recent Census data revealed that the average number of people in each household has fallen to 2.5 people, from 2.6 people last Census.

In 2021, 70.5% of households were family households, while 25.6% were single-person households – that compares to 24.4% in 2016.


While that seems like a small decline, the reduction in household size equates to a significant increase in demand because, as we know, a smaller household size leads to the requirement for a larger number of households.

And all these households need somewhere to live.

The shrinking household size has acted to put more pressure on an already tight property market, creating a housing crisis.

Meanwhile, demand for detached property soared, especially in lifestyle suburbs, as homeowners looked for more space while working from home amid the Covid-19 pandemic.

More than ever before, a larger number of buyers were looking for larger properties and shying away from smaller units in inner-city areas.

Those living in one-bedroom apartments seem to want two-bedroom apartments.

Those living in three-bedroom homes seem to want an extra bedroom.

Everyone seems to need a Zoom Room nowadays, don’t they?

The change in demand created a bottleneck with the number of buyers looking for 3+ bedroom properties far outweighing the supply of that type of property – hence robustly strong and soaring house prices over the past couple of years.

House Size

Shrinking households is a broader trend

Shrinking household size is part of a broader trend of an ageing population combined with couples forming and having children later in life.

The Census data also shows that 3-person and larger households have declined as a proportion of households.


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