The rise and rise of single-person households may deliver fundamental change to the rental market in the years ahead.
The Australian Bureau of Statistics forecasts that the share of single-person households will increase by between 57.1 per cent and 61.9 per cent from 2011 to 2036.
That will exceed the growth in the number of households, which is expected to rise by between 49.3 per cent and 51.2 per cent.
SQM Research managing director Louis Christopher said housing development will need to increase to keep pace with more people wishing to live by themselves.
“If it is not addressed in the long term it would put downward pressure on vacancy rates and upward pressure on rents,” he told Residential Property Manager.
“This is a longer-term trend we are discussing and within that, of course, you have shorter-term cycles coming through – we are talking about a trend that is going to last the next 20-30 years, maybe even longer.”
However, Mr Christopher said this will not put immediate pressure on the rental market.
“The challenge is for planners to accommodate this appropriately. Second, there is the opportunity for developers to meet that demand,” he said.
CoreLogic RP Data head of research Tim Lawless said developers were already responding to the change in living habits.
“If you look at the number of development approvals, apartments are now outweighing detached houses,” he told Residential Property Manager.
“That is for a couple of reasons – it is partly due to the changing demands from consumers and households, but it is also much more affordable.”
Mr Lawless said changes in the rental landscape will depend on how much supply comes on the market.
“I think undoubtedly you will have that level of demand that will be growing, but will supply grow in line with it, or faster than it?” he said.
“Can developers actually match it quite efficiently, because historically Australia has under-built.”