[+] Australians Struggle to Hand Over 13 Million Spare Rooms

Although people might not want to hear it, Australia’s mansion obsession isn’t helping anyone. Acquiring land and owning multiple multimillion-dollar properties across Australia might seem wise and appealing but the nation’s housing crisis argues against it. “In Australia we have such a history of having a big back yard and a big home to live in,” Ray White chief Nerida Conisbee says. She says there is little efficiency in the way people are using space in their large homes, meaning there are 13 million spare rooms in Australia. But downsizing is not attractive to older couples or singles living in big family homes because there is “very little incentive for them due to tax reasons”, according to Conisbee. As well, there is a lack of supply for people who do want to downsize, including empty-nesters with little to no higher-end apartments or townhouses. They need to be suitable for the needs of downsizers not only in amenity but location—not everyone wants to move a long way from where they have called home for decades. “People want a home they can lock and leave when they go on holidays, somewhere that’s low maintenance—so we need to provide more high-quality, low-density homes for them,” Conisbee says. ▲There are around 13 million spare rooms in Australian homes. “Holiday homes became more problematic during Covid—there was a big surge in holiday home purchases, a lot of them in areas that didn’t have a rental crisis but a rental crisis has now emerged,” Conisbee says, pointing out that such investment means homes out of the market that could have been owner-occupied or rented are now lying dormant for much of the year. There has also been a rise in the number of people choosing to live alone, particularly couples without children, as a result of Covid, according to Conisbee. “Australia is very low density; the homes in Australia are overwhelmingly single homes and we don’t have many apartments compared to the rest of the world,” she says. “For much of the rest of the world, it’s pretty normal to live in an apartment and the proportion of single homes in bigger cities is quite low.” But it is not just a case of having more luxury apartments in nice suburbs. How locations are developed and the amenity they offer is crucial. Matthews Architects managing director Gerald Matthews works in the Adelaide sector, and says the lifestyle in the South Australian capital’s CBD has changed. ▲ Adelaide city has heritage buildings sitting dormant. “The more diversity you can bring in, the more walkable you can make the city and the more recreational you can make it, the better it works,” Matthews said. So breathing life back into cities and creating opportunity for downsizers can’t just be about heritage buildings being turned into the apartments but rather ensuring a diversity of infrastructure, including entertainment. “There were so many cinemas in the city, it wasn’t just a place to go to earn money and then go and spend money, it had more of a social community and a rich tapestry to it,” Matthews says. ▲ Sutherland , a century old hostel-to-residential project designed by Matthews Architects. Construction is slated to begin next year. The Great Aussie ideal For several generations, Australians have been brought up with the ideal of striving for 10-plus investment properties and the biggest home on the block. So, instead of encouraging younger generations to live in a large home and to pursue a lavish lifestyle, should they be encouraged to take what they need and become the ones to solve the housing crisis? “To get into a desirable suburb, people have to move to apartments so the view on how to live is starting to change, it is a generational change,” Conisbee says. According to realestate.com, buying even a low-level studio apartment is near impossible. For example, it would cost a first-home buyer from $180,000 for an 18sq m apartment in Brisbane. ▲ A studio apartment in Brisbane City. Source: realestate.com This offers no investment upside for the buyer when they want to sell it on—what can 18sq m be turned into? Conisbee said more higher-end apartments needed to be added to prestigious suburbs, giving long-term residents the incentive to free up space—their three-plus-bedroom homes—they don’t really need or use. Such larger family homes could, among other things, be ideal for young people to live in as share houses ahead of buying their own property, giving them the chance to live affordably as they save towards deposits. It also adds stock to a market calling out for properties almost across every segement of the market. Australia is grappling with a housing crisis as bad as any in its history. There’s little doubt part of the solution to the crisis—and freeing up those 13 million spare bedrooms—is creating a compelling reason for established home owners to give up all that space. But in what is almost a chicken-and-egg situation, for empty-nesters to give up their big homes they need a compelling reason to downsize to an apartment that at the moment at least are in short supply. It is an opportunity many developers are making the most of and doubtless more will follow suit as the way we live changes to suit the times. 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[+] Australians Struggle to Hand Over 13 Million Spare Rooms

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