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New data has sparked questions about the suitability of Australia’s housing stock for the average household size, showing a clear mismatch.
A recent analysis has revealed a stark discrepancy between the types of homes built and their occupants.
The latest Cotality report showed that despite most Australian households being made up of just two people, the bulk of the country’s stock caters for bigger families.
The data, based on statistics released by the Australian Bureau of Statistics (ABS), found that most Australian households consist of just one or two people, but the majority of houses contain three or four bedrooms.
Across the country, data showed that households with just two people take up the largest share at 34 per cent, but the majority of houses, 42 per cent, are three-person homes.
Similarly, one-person households make up the next highest share at 27 per cent, but one-bedroom and studio make up just 6 per cent of Australia’s housing stock.
The data also took into account different types of households, with 30 per cent of households being families with dependents, and 31 per cent of households being couple families without dependents.
Of the one-person households, the data suggested that around 40 per cent are aged 65 and over, and households without dependents have an average of 0.8 people aged 65 or over.
Cotality’s head of research, Eliza Owen, said that despite Australian households becoming smaller, demand for bigger homes has prevailed.
She noted that over the years, larger homes have become more appealing to households, as many people utilise extra bedrooms as a home gym, workspace, or home theatre.
“It is also reasonable to assume that many couple family households without dependents have more bedrooms because they are planning to have children,” she said.
Additionally, home owners and investors have been on the lookout for larger homes.
Data showed that demand for larger dwellings has risen, with four-bedroom dwellings leading the national five-year annualised growth rate at 8.7 per cent, compared to zero- to one-bedroom dwellings at just 3.7 per cent.
“In fact, higher capital growth may be part of the reason for trying to buy and hold houses over units, or larger houses over smaller houses,” Owen said.
While larger homes have been more attractive for buyers, Owen noted that the new housing stock has shifted towards a bigger unit share.
She said that dwellings other than houses, including units, may gradually provide more suitable options for smaller households, accounting for 40 per cent of approvals over the past decade to June 2025.
Ultimately, Owen said while there is nothing wrong with having more bedrooms than people in a dwelling, there may be inefficiencies in the way housing is being allocated.
“After all, a ‘traditional’ family of four may have more need for a three-bedroom dwelling than a household of two people,” she said.
“Yet at the 2021 census, ABS data showed that for family households, there were more two-person households in three-bedroom dwellings (about 1.3 million), than three- or four-person households (about 1.1 million),” she concluded.
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