Number of Households

IBISWorld expects the number of households to increase by 1.8% during 2024-25, to 10.71 million. This rate of growth indicates that household growth has recovered from the pandemic-led disruptions to household growth. The key driver to household growth is the surge in net migration, which has boomed since the Australian Government reopened Australia’s international border in February 2022. Yet, surging net migration is also constraining housing supply, leading to record-low vacancy rates in many major cities and steep growth in rental prices. Although growth in rental prices is set to ease over 2024-25, prices will remain elevated, slowing an otherwise strong growth in households.

Over the past decade, rising demand for inner-city living and increased urbanisation have fuelled multi-unit apartment construction activity, which has driven a trend towards smaller property sizes. Although property sizes have declined, the number of people per household has remained largely stable. The pandemic added further volatility to the housing supply, especially after the Australian Government closed the international border and net migration collapsed. The average household size got smaller, particularly as rental prices collapsed in major cities with very low migration and now international students. Many Australians who lived in shared houses moved out on their own during the pandemic, which further reduced the average size of households. As borders reopened in 2022 and migration recovered, these trends have put significant pressure on the housing supply, which slowed household growth.