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Australian Household Size Lowest On Record

Australia’s borders with other countries were mostly closed for almost two years. International tourism pretty much stopped, and the number of people moving to other countries from Australia and other countries on temporary visas went down.

Post COVID Rental Vacancies

Even though more people left the country than had left since World War I, a rental crisis began to happen. Between January 2020 and January 2022, when the borders reopened, the national rental vacancy rate dropped from a healthy 2.1% to just 1.3%, the lowest level in 15 years.

Even though more than 365,900 people with temporary visas who are likely to need housing will leave the country between December 2019 and December 2021, Australia managed to have a rental crisis pretty much on its own.

There are a lot of things that have led to this result, such as changes in internal migration patterns and the rise of people who work from home. However, it is likely that the biggest reason for the rise in demand is that Australian households are getting smaller as more and more people want their own space.

Rental Price Changes

To give you an idea of how much this demand has gone up, research firm SQM Research says that from August 2009 to March 2020, the national asking rents for homes went up by 22.5%.

But between March 2020 and January 2022, which is only a small part of that time, asking rents for homes across the country went up by 14.3%.

Australian Household Size Changes Upto 2022

Australian Household Size Changes Upto 2022

Persons Per Household Changes

In 2016, the census found that the average number of people living in a home was 2.57. Based on the most recent data, which the RBA released last week, that number has gone down to 2.47 people per household.

This trend has been seen in the data so far for 2022, which shows that it is not just the direct effects of the pandemic that are causing people to start new households. The average number of people living in a home in Australia is going down, which means that more people are looking for their own space to rent.

The average number of people living in a home in Australia is going down, which means that more people are looking for their own space to rent. Brendan Coates, director of the economic policy programme at the Grattan Institute, thinks that this change in the average size of Australian households has caused the need for an extra 400,000 homes. Some of these households have bought their own homes, but a large number have probably joined the ranks of renters across the country.

But now that the borders are open again and the Albanese government is bringing the number of permanent migrants who are not there for humanitarian reasons to its highest level ever, there will be more people looking for places to live.

Temporary Visa Holders

Since the beginning of 2022 until the end of August, the number of people in the country with temporary visas (excluding visitors and people with other visas) has gone up by 220,000. The Albanese government is trying to clear up a backlog of 872,000 visa applications. Since June 1, another 2.22 million visa applications have been made, which means that the rental market is likely to keep getting more and more crowded.

In a recent column, Alan Kohler of the ABC said, “If the Labor government doesn’t start coordinating immigration and housing, the mixture will be explosive, because Australia’s housing crisis is going to be horrible next year.”

When you look at the data from the Department of Home Affairs about people with temporary visas, it’s clear that Kohler and the other people who have brought up this issue are right to be worried. If the number of students, people on working holiday visas, and people with skilled employment visas went back to where they were before COVID, that would add another 343,000 people to Australia. Many of these people would need some kind of housing.

Stabilisation of Rents

Even though there has been a big increase in the number of people coming to the country on temporary visas, there may be signs that the rental market is starting to stabilise a bit. In September, the national rental vacancy rate went up a little bit, according to data from SQM research.

But, like a lot of other things since the pandemic started, your mileage may vary depending on where you live. For example, the number of empty apartments in Sydney keeps going down. This could be because the harbour city is so popular with people on temporary visas.

In Brisbane, on the other hand, the number of empty rental homes just hit its highest level since April. This difference is clear in cities and regions all over the country, where some are much more popular than others Predicting how all of these different factors will come together to affect the rental market in 2023 is, to say the least, difficult.

On the one hand, factors like the spread of pandemics and more people moving to the area could cause more people to want to rent homes. On the other hand, the rising cost of living and the skyrocketing cost of rent are forcing many families to change where they live.


No one knows how these and other factors will balance supply and demand in the rental market in the future, but it will be important for the lives of millions of Australian renters and people on temporary visas who need rental housing.