28 March 2013 – The development industry’s insistence that we need much more detached housing is not quite right, according to the Grattan Institute’s Jane-Frances Kelly.
Speaking at the Home Conference by NSW land agency UrbanGrowth earlier this month , Kelly, program director, cities, for the institute, said if people could have anything they wanted most would choose “a large house in the centre of the city, with butlers’ quarters.”
Given the constraints of reality the choices people make might surprise.
For instance in Sydney 41 per cent of the population would prefer to live in a detached house.
“The proportion of the stock in Sydney that is detached is 62 per cent,” she said.
In Melbourne, 48 per cent would choose detached housing; the proportion of stock that is detached is 71 per cent.
It’s true preferences have changed since much of the housing stock was built, but if you were to raze Sydney and Melbourne to the ground this is what the market would want, Kelly said. For developers building now, it’s powerful data.
In a spirited and highly entertaining presentation, Kelly unravelled an engrossing story, all from the fruits of serious research, What Matters Most? Housing Preferences Across the Australian Population, which tapped into the sentiments of 706 people in Melbourne and Sydney.
Kelly’s point about choice was there were many assumptions that needed to be challenged if the market was to deliver housing types that matched demand
She pointed out that the notion of the “Great Australian Dream” of a detached house of one’s own, originated with 1950s prime minister Robert Menzies.
“Menzies described himself as British, even though he was born and bred in Australia,” Kelly pointed out. “He was also not very comfortable with women in the workplace.
“Why is it that two of those thoughts are laughingly outdated and the other is regarded as something that most Australians aspire to?”
Could this aspiration be something that politicians often pedalled for, well…political reasons?
The survey threw 56 characteristics into the mix and then sorted the results for the top 10 preferences.
The answers have challenge conventional wisdom, which is why Kelly and co-author Ben Weidmann went to significant lengths to make the methodology “totally transparent”.
For instance, the top 10 preferences did not include a garden nor proximity to jobs, ahead of type of housing.
The reason, Kelly said, is that although these elements are important for some people they are not important for the majority.
“People will say it’s wrong because the garden is not in it, but this means the garden isn’t important to the majority of people in the sample,” she said.
On proximity to jobs, Kelly said: “People change jobs more often than they change houses.”
The same goes with proximity to schools not making it. “Some people don’t have kids.”
The question is, who are the developers developing for, and who are the politicians and bureaucrats planning for?
They might want to know that the fastest growing households are single person households and single women over the age of 55.
“The perception is that women, when their husbands die, want to stay in the same large house because they need the extra bedrooms for when their grandchildren come to visit,” Kelly said.
This would come as a surprise to the 20 per cent of women in that group who don’t have children, she joked.
And another clincher: The proportion of people under 45 who have young children is not as mainstream as portrayed in the general media.
It’s only 19.4 per cent of households, Kelly said.
“They are an incredibly important part of the population,” she stressed. But the numbers are clear.
“The fact is we’re making policy decisions based on them.”
In one note during the presentation, Kelly touched on an issue that has been increasingly raised in analysis of the residential property market.
Where is the innovation?
Yes, it’s more expensive to build medium-density but there’s a reason this might be so, she said. “We are really, really terrible at innovation in medium and higher density.”
We are really, really terrible at
innovation in medium and higher density
The main reason for that, Kelly said, is that developers have typically done less of it in the past, and there’s a dearth of knowledge about how to do it more effectively.
The culture of negative gearing of investment properties also calls for product that is “as standard as possible”.