Australia in 2066: Bigger, Older, Wealthier — and a Wider Housing Divide

# Overview Treasury's seventh Intergenerational Report projects Australia's economy, population and federal budget over the next 40 years. Headline numbers show a larger economy and higher average real incomes, but the report also flags slower percentage population growth, rapid ageing and a growing housing divide between homeowners and non-owners.

# Population and migration

To keep the working-age cohort expanding, Treasury assumes long-run net overseas migration of 235,000 people per year. Even with lower percentage growth, the absolute increase requires around 11 million additional residents over the period, creating sustained demand for dwellings, infrastructure and services.

# Ageing and housing demand Life expectancy is projected to rise (to about 89.5 years for women and 86.1 years for men), and the number of Australians aged 65-plus is expected to almost double while those aged 85-plus will roughly triple. This shift will increase demand for health and aged-care services and change housing preferences.

Older households are likelier to want low-maintenance homes close to shops, transport, medical services and family. That implies stronger demand for well-designed apartments, townhouses and villas in established suburbs. The report notes that planning systems and local opposition have limited suitable downsizing options in many neighbourhoods where older owners already live.

# Economy and productivity

# Housing and the widening divide The report treats housing as a major source of intergenerational insecurity. Home ownership rates for 25–34-year-olds are well below levels enjoyed four decades ago. Demand for housing will remain strong, but capital growth is likely to become more geographically concentrated in locations with scarce supply, strong infrastructure, employment and higher-income households.

The IGR mentions "housing supply" only five times in a 352-page report, indicating limited emphasis on policy levers that directly address the supply-side constraints that shape affordability and access. Given the demographic shifts, medium-density development in amenity-rich locations is presented as both an economic and social necessity.

# Practical implications For policymakers: migration settings, productivity measures and housing policy are the levers that determine whether headline economic gains translate into broad living-standard improvements.

For property buyers and investors: expect future capital growth to be uneven. Demand will tilt toward locations with constrained supply and good services, plus housing types that suit older households and smaller household sizes.

For younger households: longer work lives and harder paths to building wealth and home ownership are projected unless housing supply and policy settings change materially.