Census 2021: Australia’s changing population

Last week, the ABS released the first tranche of its long-awaited Census 2021 data, the most detailed and important data collection undertaken by the Bureau every five years.

The 2021 Census was conducted from July to September last year, when various COVID restrictions were still in place.

Overall, the Census revealed how Australia as a nation continues to change:

• We’re undergoing a significant generational shift, with Millennials (25-39 years) and Baby Boomers (55-74 years) now representing an equal share of total population (21.5%)
• We’re becoming more culturally diverse, with more than half (51.5%) of Australians having a parent born overseas, and more than a quarter (27.6%) born overseas themselves. India has overtaken China and New Zealand as the third most popular country of birth of Australians (behind Australia and England)
• We’re becoming less religious, with the percentage of the population with no religious affiliation increasing to 38.9% in 2021 from 30.1% in 2016
• One in every four of us is suffering from at least one chronic health condition – with the most reported chronic ailments being mental illness, arthritis and asthma.

And, outside of population and demographics, the Census is also an important source of information on Australia’s housing environment.

The results show that the proportion of homes owned outright has fallen over time. The share of homes owned with a mortgage rose slightly to 35.0% in 2021 from 34.5% in 2016, and the share of homes rented was 30.6%. The share of homes owned outright remained at 31.0% compared to the previous Census in 2016, but this is compared to 40.4% in 1991 – a significant fall over the last three decades.

Chart 1: Housing tenure in 1991, 2016 and 2021

Source: ABS 1991, 2016 and 2021 Census.

Between 2016 and 2021, the median Australian mortgage monthly repayment increased by approximately $100, from $1,755 to $1,863. Low interest rates have been a hallmark for borrowing in recent years, leading to a rise in mortgage affordability. The Census found that paying off a mortgage has become less financial draining for Australians, as the proportion of households where mortgage repayments are less than or equal to 30% of household income has increased to 74.0% in 2021 from 67.3% in 2016.

However, the low interest rate environment of the last few years is fast disappearing. Today’s RBA announcement of another 50-basis point rise in the cash rate to 1.35% confirms this. Rate hikes are unlikely to stop here with inflation still beyond the RBA’s control – placing more and more pressure on current mortgage holders and making fresh home loans less attractive to prospective home buyers.

Finally, there were also a startling one million homes sitting empty in some form across the country on Census night, representing almost 10% of all dwellings. A large number of these may be from people staying in their holiday homes during lockdowns, leaving main places of residence vacant. Further, the closure of international borders saw a larger share of investment properties empty than pre-COVID, with rental demand suffering from lower inflows of migrants.

However, even accounting for COVID, this was a higher level of vacant homes than expected. With housing affordability a perennial Australian dilemma, how we manage vacant homes may become a new policy focus – especially as interest rate hikes continue to constrain our housing market.