Ageing population to drive downsizing trend and force major rethink of Australia’s housing response: Colliers
Australia’s growing ageing population will underpin the opportunity for a significant housing response, with the possibility of shaping future demand and dwelling requirements across the nation.
Based upon ABS population projections across Greater Sydney, Greater Melbourne, Greater Brisbane and the ACT, the population aged 55+ will increase by 4.5 million people by 2071, highlighting the ongoing requirement for new housing solutions to be delivered across the market to cater towards both this demographic and others impacted by their emergence. This population cohort (55+ years) currently represents around 1 in 4 people and is anticipated to shift to around 1 in 2.5 people by 2071 across each of the capital city markets above.
Through the medium term, Greater Melbourne is set to see the largest nominal increase of people aged 55-74 years old, followed by Greater Sydney and South-East Queensland, making it a prime location for right-sizers, however, the growth across each will support strong right sizing opportunities in each respective market.
“The right-sizer cohort is increasingly reflecting a blend of the established “Baby Boomers” and emerging “Generation X” that are ageing into this cohort," Managing Director of Residential at Colliers, Diana Sarcasmo, said.
"With the recognition of changing expectations and aspirations across the generations, housing choice and requirements will need to be a dynamic consideration for the future. This increase in population will underpin the critical decisions of property developers and policymakers moving forward, as they need to cater for the ‘right-sizer’ cohort.”
As part of efforts to address Australia’s housing supply crisis, many older homeowners are opting to move out of large, underutilized homes into apartments that better suit their lifestyle needs. This trend frees up larger houses for families, making better use of existing housing stock and creating new opportunities for those seeking more space.
“While right-sizing is not a standalone solution, it highlights how individual choices can contribute to alleviating housing pressures. Combined with broader initiatives like increased construction and urban planning, this movement represents a small but meaningful step towards more sustainable housing solutions in Australia,” Sarcasmo added.
As of 2021, the number of detached homes owned outright by households over 55 in capital city markets totals 855,260, according to the ABS. In comparison, the total of current occupied apartment stock throughout the market is 939,763. This highlights the potential impact that downsizing detached homeowners may have on apartment demand, especially as the ageing population continues to grow).
Rightsizers have highlighted a reduction in dwelling size, decluttering, more manageable internal and external spaces as well as potential financial benefits being prime motivators for moving. Many of these benefits can be facilitated through well-designed apartment options, with right-sizers able to use funds from the sale of a detached home to support their lifestyle into retirement.
While historically there has been a higher representation across two-bedroom options occupied within apartments owned outright by these cohorts, it is expected this new trend will support an increasing push and opportunity for three-bedroom options, from this right-sizer cohort.
“The increasing representation of couples without children residing within apartments has the potential to support a greater demand for three-bedroom options. This trend has been observed across recent movers into apartments as well as detached houses. Three bedrooms offer increasing space for a larger ageing household with the flexibility to repurpose rooms to align with right-sizer’s lifestyles as they age,” Ms Sarcasmo said.
Historically, apartment stock has had a greater focus on one- and two-bedroom options, as apartments are increasingly required to support more permanent and diverse households. It is anticipated that three-bedroom stock will increasingly reflect the demands of these households in the future.
“To date, there has been a focus on smaller scale projects occupied by right-sizer and retiree households, however, they have also demonstrated acceptance of a diversity of project types (including medium and higher density). Developers should increasingly have these occupiers in mind when considering their project designs and product compositions with consideration for the significance of this demographic shift,” Ms Sarcasmo said.
