As a kid, I could never have predicted that I’d grow up to become an adult who looks forward to the Census data being released.
Yet that’s the position I found myself in last Monday night.
The Census is a survey conducted by the Australian Bureau of Statistics every five years, most recently conducted in August last year.
The Census provides the most comprehensive snapshot of our country; how many of us in number, where we live, how we live, our backgrounds, beliefs, education and profession. Pretty much everything there is to know.
More importantly, because the Census has been collected every five years since 1961, it tells a story of how we are changing and evolving as a nation. In this sense, the numbers themselves are less important than the story they tell.
For investors, the Census provides important information that can guide us on where to invest, and what to invest in.
It provides the micro detail around which suburbs have got the fastest growing populations and incomes, which will typically translate to growth in real estate prices.
Then there’s the big picture story that concerns Australian households; what they look like and how they are changing (if at all).
The average household in Australia now contains 2.5 people – which is down from 2.6 people in the previous two Censuses.
That might not seem like a significant change.
However, that one ‘small’ change alone means that, even if our population didn’t grow by one single person, we would need to build an extra 70,000 dwellings per annum.
Like an onion, there are layers to the composition of our households.
The total number of dwellings in Australia increased by 10 per cent between 2016 and 2021. However, not all types of dwellings increased at the same rate. One-bedroom and four-bedroom dwellings increased at double the rate of total housing (19 per cent and 21 per cent, respectively). Whereas three-bedroom dwellings increased by only 5%.
The increase to four-bedroom housing could be a by-product of the suburban tree change movement inspired by the pandemic. However, a similar trend has transpired for the last three Censuses in a row. I think it’s more likely we are seeing people convert typical post-war three-bedroom houses in suburbia into four-bedroom homes.
It’s the one-bedroom trend that really jumps out at me, and it’s a trend that has only occurred in the last two Censuses.
It can’t be a coincidence that the one-bedroom trend coincides with the fact our population is getting older, and we’re seeing an increase in the proportion of Australians separated and/or choosing not to have children.
17.8 per cent of Australia’s population is aged over 65 today, versus 15.8 per cent in 2016.
Whilst it’s still more common for couples to have children, the number of couples without children is rising at one and a half times the rate of couples that have children.
The rate of separation and/or divorce is increasing at twice the rate of marriage and de facto relationships.
The end result being a demand for one-bedroom housing.
What if?
One-bedroom housing has typically been supplied in the form of inner-city high rises.
But what if you’re an older couple, a couple without children, or a divorcee, and don’t want to live in a one-bedroom apartment in the inner city?
What if, instead, you want to be closer to your friends and family in the suburbs, but don’t want the excessive cost of a three- or four-bedroom house that you don’t need.
I think there is a massive opportunity over the next decade to provide one- or two-bedroom housing outside of high rises and inner-city living.
I’m thinking smaller blocks of land, granny flats, Fonzie flats and even shared housing in suburban communities on blocks of land or low-rise apartments.
It provides an affordable, low maintenance option for grandparents wanting to be close to their kids, grandkids and friends they’ve raised their families with.
It provides a cost-effective solution for separated families conscious of now having two sets of living costs and wanting to find a way to efficiently share parenting duties.
For homeowners, it could provide an opportunity to offset mortgage costs with an additional income stream.
For investors, it could provide multiple income streams from the one block of land: be it two tenants in the one house, a separate granny flat or even a lump sum amount from the subdivision and sale of part of their land.
It’s these kind of insights, stories and ‘what ifs’ that I love about our Census.
Want to see some Census data yourself? Go to this link and type in your suburb, town or capital city in the search bar.
