A sharp fall in the size of households, as people moved out of share houses or their parent’s homes, helped offset the effect of the collapse of immigration on the Australian housing market, the Reserve Bank believes.
RBA assistant governor Luci Ellis says people moving out of share houses and their parent’s homes contributed to property price strength during the pandemic.House prices soared at their fastest rate in more than 30 years during the pandemic on the back of government support programs and record low official interest rates despite stagnant population growth.
“Spurred by the experience of lockdown and self-isolation, many people understandably wanted a bit more space, and perhaps a garden. Some also needed space where they could work, or perhaps just fewer flatmates to share that space with,” she said. The strong demand was also contributing to a 50 per cent increase in the time it takes for a new house to be built. The average build time had been 6 months but now it was closer to 9 months.“Prices of existing homes have been easing in some cities, so the relative attractiveness ofnew homes will ease as well,” she said.