Death of the Australian Dream

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Bernard Salt says “it is found in every city, suburb and town on the Australian continent. It is the quintessential Australian home defined as a separate house on a separate block of land”.

Yet, the latest Census data dissected by Salt shows that Australians are increasingly being shoehorned into high-rise apartments and granny flats, which were the fastest growing dwelling types (place of enumeration) at the 2021 Census:

Dwelling type

According to Salt, “Sydney and Melbourne lead Australia in denser living partly because they offer more affordable access to the housing market. But also because denser developments located closer to the CBD obviate the need for commuting”. These two cities also happen to be the key magnets for migrants and international students, which means these cities will continue to grow up rather than out.

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Before the pandemic hit, the Australian Bureau of Statistics (ABS) projected that Sydney and Melbourne would roughly double in size to around 10 million people each by 2066:

Capital city populations

And because of this explosive population growth, the Urban Taskforce projected that apartments would make up half of Sydney’s housing stock mid-century, whereas only one quarter of Sydney dwellings would be detached houses:

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Sydney dwelling composition

A similar but less extreme transformation will happen to Melbourne, which will grow faster but is less land constrained.

That’s the death of the Australian Dream right there. Not only has housing become increasingly unaffordable as home ownership rates have collapsed:

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Australian home ownership rates

But the majority of those that do buy a home in the future will be forced to live in shoebox apartments rather than a detached houses with a backyard.

Strangely, this outcome is celebrated by the army of ‘Big Australia’ boosters who continue to gaslight the population into believing shoebox living is in our best interests.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.