Average household size jumps to 2021 levels thanks to rising cost of living pressures

Around one in five households is now multigenerational, with more Aussies responding to the cost of living crisis by returning to the safety of family homes.

Analysis of data from the Australian Bureau of Statistics (ABS) has shown the average household size has risen to about 2.5 nationwide, after experiencing a dip between 2023 and 2024.

Numbers have returned to a level similar to 2021, where there were 335,000 multigenerational households across Australia: a 22 per cent increase from the 275,000 households in 2016.

At this time, it was discovered the majority of people between 18 and 29 years of age – 54 per cent of men and 47 per cent of women – were living with their parents.

Analysis of ABS data has estimated the average household size has returned to around 2021 levels, where 1 in 5 Aussies lived in multigenerational households.

Housing Industry Association senior economist Tom Devitt said the fall and rise of the household size could reflect Australia’s growing financial struggles.

“They dropped during the pandemic, which we believe revealed just how much people want their own space,” he said. “And we believe household sizes have bounced back mostly because of affordability constraints/cost of living, rather than people really wanting to live with more roommates and relatives.

“It could be a matter of necessity rather than genuine preference.”

HIA Senior Economist Tom Devitt said many could be moving back in with their parents for financial reasons, despite wanting to live in their own spaces.

National builder Metricon homes has seen a 30 per cent increase in demand for multigenerational living requirements over the past two years, including features such as additional ensuites, dual-living separation and additional bedrooms on a ground floor.

Queensland sales manager Cody Roberts said with hundreds more seeking these options every year, the company changed its business model so almost every home plan would have options for multigenerational expansions.

“We have seen a big increase,” he said. “Our range has increased to suit.”

“Since Covid, we saw a lot of movement in terms of people relocating and moving back with families … whether it’s cost of living-driven or cultural differences.”

The average household size in Australia experienced a post-Covid low, that has only started to bounce back over 2024. Picture: HIA, RBA, ABS

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Mr Roberts said while Aussie homes were not often built for multiple generations, many homes with multiple levels could make some simple changes to fix that.

“We are seeing a bigger spike in families still facilitating their younger children … they want that separation in their living,” he said. “They’re usually very surprised how we can fit their requirements.”

“A very common upgrade, depending on the floor plan, is a guest suite through the entry of the home,” he said. “Separated from the other bedrooms … potentially with ensuites and their own living spaces.”

97 Bundah St, for sale in Camp Hill, QLD. Multigenerational homes are often divided across two levels, with older generations seeking ground-floor options for easier living.

Place Camp Hill agent Joanna Gianniotis said it would take a long while before renovated homes would keep up with the current demand of large multigenerational spaces.

“Traditionally that hasn’t been a [common] floor plan, so that’s why it’s been difficult to be able to find,” she said.

“There is a rise in that movement, probably driven by the cost of housing … and the cost of aged care. People are combining their funds and trying to find a house that’s suitable.”

“It actually complicates the issue, because the older parent or grandparent won’t be wanting stairs – they’ll want a level property, and their own privacy as well. So it’s not just a matter of buying a number of bedrooms in their own house, they want it laid out specifically as dual-living.”

Place Camp Hill agent Joanna Gianniotis said multigenerational markets needed to look at a wider range of options for a house, with many homes not built to fit these needs.

Ms Gianniotis said multigenerational markets need to look for homes in a wider geographical range to compensate, especially with increasing demand from all walks of life.

“It used to be a multicultural concept, whereas now it’s not – it’s all nationalities,” she said. “You’ve got the older children not being able to afford to move out, and they’re saving for their own property. So the average age of children moving out has increased, and that’s a market that I don’t think has been taken advantage of.”

Those with the backyard space are looking to granny flats as a solution for separated living across generations. Picture: Brad Fleet

One solution families may look towards is the addition of granny flats on their pre-existing properties. CEO of portable granny flat manufacturer PennyGranny, Michael Doubinski, said around 25 per cent of their clients were looking for granny flats to accommodate their kids, be it for finance reasons or for help around the house.

“It’s a substantial number now,” he said. “Parents get older. They don’t want to go to nursing home, so we have clients who’ve been with us for years, they rent out a granny flat, we move [their kids] next to them.”

“The younger kids, they can’t afford rent – look at Sydney. Some are living with parents, but that’s not the best option when you need your privacy.”

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