medium density housing

Beware the baby boomlet

It pays to watch population trends so you can stay abreast of housing demands.

Author

Angela Lillicrap

As it has in the past, demographic changes will continue to drive the demand for housing, its type and its location. In Australia, the composition of our population continues to evolve. We are seeing our population increase not only through natural growth, but also change as our migration intake varies.

Currently, the population is growing at an annual rate of 1.6 per cent, which in the 12 months to March 2019 was an extra 388,000 people. The majority of this increase comes from overseas migration. Due to Australia’s visa regulations, many migrants arrive as young adults either to study at university or to work under a skilled migrant visa. They then often choose to stay in Australia permanently and start families.

On an interesting note, the natural population is also about to experience a mini ‘baby boomlet’ as the millennial generation, who are the children of the baby boomers, begin to have children themselves – albeit only an echo of the original baby boom. Along with the impact of overseas migration, this will result in an increase in demand for family-friendly homes in the decades ahead.

The challenge will be to determine where these new families will live and in what type of dwelling. Will they choose to continue to live in inner-city apartments or will they move to new urban growth areas? Both options have their advantages and disadvantages.

Apartments tend to be closer to the CBD where many people work, meaning a shorter commute and access to more services, but they can lack space and sought-after amenities for new families. On the other hand, detached houses in greenfield estates hold a good deal of appeal because you have the advantage of owning a piece of land and greater freedom to build the type of home you want, but you are further away from the CBD. 

There is however a third housing option which is currently underprovided for in Australia – ‘the Missing Middle’. This consists of low-rise medium-density dwellings, such as townhouses, duplexes and manor houses, in middle-ring, established suburbs.

population growth young family

Utilising the ‘missing middle’ allows for increased density and more efficient use of land and existing infrastructure

 

Utilising the ‘missing middle’ allows for increased density and more efficient use of land and existing infrastructure while also maintaining the local character of the existing neighbourhood. Increasing the population in the middle ring of our cities may also see a better take up of public transport, thereby reducing the number of vehicles on the road, and the better utilisation of other public services needed to service the community.

It’s not just families with young children though who are looking for these types of medium-density dwellings that are close to – but outside – the CBD. Downsizers and empty nesters also often seek out smaller style dwellings within the community that they already belong to.

Australia has an ageing population, and with more people living longer, this group is only going to keep getting bigger. In many cases this group downsizes due to a major life event, such as the death of a family member, other substantial health issues or divorce. This means ageing Australians are in a more vulnerable position when negotiating for the sale or purchase of a property. They may not have time to wait for a better offer or a house in a preferred area.

Unfortunately, it is not as simple as just building more low-rise medium-density dwellings. Local councils have control over development across our cities. Brisbane City Council, for example, has moved to ban the construction of missing middle type dwellings in some residential areas for two years. In stark contrast, the NSW Government has taken a different approach by al-lowing medium-density dwellings to be fast-tracked through a complying development pathway. 

This highlights the amount of influence councils can have on promoting or discouraging the different types of housing in our cities. Planning regimes are important, but overly restrictive planning environments can result in increased house prices when the market is unable to build the types of dwellings that the market wants or needs.

The challenge for the federal Housing Supply Minister and state governments is to find the middle ground between greenfield and high-density infill development, in order to create affordable, family-friendly homes across our cities for all households at all stages of their housing lifecycle.

HIA Economics regularly releases a wide variety of reports each year which are free or discounted to HIA members.

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