“It’s perfectly acceptable and desirable for people to have spare bedrooms,” she said.
Loading
“[But] you could ask them to pay for it through land tax or you could incentivise them to move on through the abolition of stamp duty or some combination of both.
“It seems unfair to ask younger households to pay higher and higher prices for stock that is being utilised by older households.”
She acknowledged that suggesting someone move out of their family home and downsize is “a big ask”.
Quantify Strategic Insights head of data and insights Angie Zigomanis thought there were challenges in trying to make sure the upcoming pipeline of homes fit the actual size of households.
Loading
“In an ideal world, you’re trying to build as much diversity as possible, a mix of one-, two-, three-bedroom apartments, townhouses and anything else,” he said.
“In the current market, it’s just unfeasible to develop apartments … to get any development off the ground, you really need to find a way to make developments cheaper to build.”
He highlighted recent rises in construction and labour costs, which have meant it is most feasible for developers to focus on luxury apartments for wealthier downsizers.
“Someone is selling a $3 million house to buy a $1.5 million apartment: you can make a $1.5 million apartment stack up, but you can’t make a starter apartment stack up for $600,000.”
Developers need to achieve a certain amount of pre-sales before they can build an apartment project. But he noted owner-occupiers often hesitate to buy off the plan, then construction can take so long that a young buying couple might have a toddler by the time they take the keys.
A diversity of home sizes is needed.Credit: Sitthixay Ditthavong
Zigomanis said one way to overcome this could be to reproduce a NSW plan where the government will guarantee a set amount of apartment pre-sales to help developers get the bank loans they need to start construction.
Ray White chief economist Nerida Conisbee said as houses have become more expensive, more households have been considering apartments instead, a trend she expects to continue.
Loading
She added that to hit the 1.2 million new homes target, more people will need to live in higher-density homes.
“Even 10 years ago, even living in an apartment or buying an apartment wasn’t really something a lot of people wanted to do, but as housing has become more expensive, that’s really changed,” she said.
“If you look at a city like Melbourne, apartments are very affordable even in very beautiful suburbs, but still people have that preference for a house. But as houses become more expensive, that will start to switch.”