(Last updated April 2025)
The New Norm in a Costly Housing Market
Australia’s housing market in early 2025 is testing the limits of affordability. House prices remain eye-watering – Sydney’s median house price is around $1.65million , with Melbourne not far behind at about $1.04million. Even traditionally “cheaper” cities have joined the million-dollar club (Brisbane’s median just topped $1million ). For a median-income household, buying at those prices means devoting over 50% of income to mortgage payments, far above the 30% stress threshold. It’s no wonder many young Australians feel locked out of home ownership.
Rents aren’t offering much relief either. They have surged to record highs nationwide, with median rents up ~36% since 2020 (adding about $171 per week to the typical rent). In 2024 alone, rents jumped another 4.8% nationally (after an 8.1% surge in 2023). The median renting household now spends roughly 33% of pre-tax income on rent, the highest share in decades. Sydney remains the priciest rental market – a median house or unit in Sydney costs around $770+ per week now – but other cities are catching up. Vacancies in many capitals are under 1%, so competition for rentals is fierce. Faced with these pressures, it’s no surprise that more adult children are staying with Mum and Dad into their late 20s and 30s, and more families are welcoming grandparents or other relatives into the home. What used to be relatively rare in mainstream Aussie culture is fast becoming a practical solution for survival.
How fast is this trend growing? Recent data tells the story. Between the 2016 and 2021 censuses, the number of Australian households containing three generations under one roof jumped by 22%. Research by UNSW found that about one-quarter of Sydney households now have more than one generation living together. And that was before the latest cost-of-living spike – the figure is likely higher today. The Reserve Bank’s economists have even noticed household sizes rising post-COVID, reversing the pandemic trend of people spreading out. In late 2024, the RBA’s chief economist noted that more adult children were staying home longer and spare bedrooms that briefly became home offices were being filled by returning family members. Some people in their 30s and 40s are moving back in with parents to ride out housing costs. Meanwhile, many younger Aussies simply never left home in the first place, delaying the big move-out milestone indefinitely.
Society is slowly shedding the stigma around living with your folks. Not long ago, there was an assumption you “had to have a reason” – like an elderly parent who needed care – to justify a multi-gen arrangement. Now, needing to save money is reason enough. Housing experts point out that multi-generational living was the norm for most of human history, and only in recent generations did the “nuclear family in a separate dwelling” become standard. In many communities it never went out of style – extended families under one roof is a cultural norm, valued for closeness and support. Today, financial necessity is bringing this lifestyle into the mainstream for Australians of all backgrounds. As one housing researcher put it, the impetus nowadays is largely economic , even if the result has social upsides.
Sharing a Home to Save Money (and Sanity)
Living in a multi-generational household can be a big financial piece for all involved. The most obvious benefit is splitting major expenses. Rent or mortgage payments, utilities, groceries – these burdens become lighter when more shoulders carry them. Multiple incomes under one roof create economies of scale. The electricity bill for one big house shared by five people is almost certainly cheaper than what those five would pay living separately. Groceries bought in bulk and family meals cooked for all are more cost-effective than everyone fending for themselves. By pooling resources, families can collectively save thousands of dollars a year on living costs.
For young adults, the chance to live at home a bit longer can turbocharge their savings. The money not spent on exorbitant city rent can go straight into a house deposit or paying off debts. Phil, a Brisbane public servant in his 20s, managed to sock away $250 every week by not renting a room elsewhere. He’s aiming to buy a unit jointly with his dad, a plan that boosts how much they can borrow and extends the mortgage term by combining generations on the loan. Another reader, Rob from Adelaide, moved into his parents’ rumpus room in 2022 and has “put life on hold” – no travel, no weekend outings – just to focus on saving for a home. It’s a sacrifice, but having minimal housing expenses makes his goal of ownership slightly more attainable in an era of six-figure deposits. Stories like these underline how multi-gen living can be the only feasible path to homeownership for priced-out millennials and Gen Z.
It’s not just the kids who benefit. Parents and grandparents can reap financial rewards too. For one, sharing the mortgage or rent with adult children can relieve pressure on middle-aged parents coping with their own bills or mortgage stress. If interest rates or other costs shoot up, having grown-up kids contribute to household expenses can prevent older homeowners from falling behind. For retirees on fixed incomes, moving in with family might be far preferable to struggling alone or downsizing to an unfamiliar place. They might contribute their pension or savings to the household pot and in return enjoy a comfortable home without paying full market rent. There’s also a potential future payoff: investing in a larger home or a granny flat now can add to the family’s property wealth in the long run (some builders note adding a granny flat can significantly increase a property’s value while providing extra living space).
Beyond direct housing costs, multi-generational setups unlock other savings. Childcare is a big one. Daycare fees in Australian cities can run to over $100 a day per child, which is a massive strain on working parents. But if grandma or grandpa is living in, families can often arrange informal childcare that saves money and is rewarding for both the kids and the grandparents. As one property expert quipped, having nan and pop around helps bring the “it takes a village” philosophy to life – grandparents can mind the little ones after school, and in return they get to spend precious time with the grandkids (plus maybe a hand with the tech gadgets or heavy lifting from the younger generation!). Likewise, adult children can help their elderly parents with care and chores, potentially delaying or eliminating the need for costly in-home carers or assisted living facilities. These arrangements can save tens of thousands in childcare and aged care costs while improving quality of life for everyone.
Importantly, living together can provide a financial safety net that wouldn’t exist if everyone lived solo. If one family member loses a job or has hours cut, they still have a roof over their head and support around them. If the car breaks down or an unexpected medical bill arrives, there might be another household member who can chip in. In tough economic times, that buffer can be the difference between treading water and going under. Indeed, studies (and plenty of lived experience) have found that multi-generational living can buffer families against poverty and financial shocks by pooling resources – the bad times are a little less bad when you’re facing them together.
None of this is to say multi-generational living is pure bliss or easy money. There are trade-offs and challenges that come with the territory, particularly around privacy and independence. Young adults may chafe at curfews or parental oversight, and older parents might find their routines disrupted by a boomerang kid’s lifestyle. Phil acknowledges that while he’s saving money, his independence has taken a hit – sharing space with parents (and a grandparent with a strict daily schedule) means “any kind of romantic relationship is near impossible” in his current situation. Living with family as an adult requires a recalibration of boundaries – both sides have to remember that everyone deserves respect and some personal space, even as they come together to share life under one roof. The emotional dynamics can be tricky, but with goodwill and communication, most families find a workable balance.
Making It Work: House Rules, Space and Boundaries
If you’re considering a multi-generational setup (or already in one), clear communication and a bit of planning are key to keeping the peace and making the arrangement sustainable. Here are some practical tips straight from families who’ve done it – and experts who have studied what works:
- Set financial ground rules early. Money can be the elephant in the room, so tackle it upfront. Decide who contributes to what bills and how much. Will the employed adult kids pay board or cover certain expenses (electricity, internet, groceries)? Or will they live rent-free to save for a deposit? There’s no one right answer – some parents refuse to charge their kids anything, others might ask for a token weekly amount – but everyone should be on the same page. Consider each generation’s income and needs: perhaps the younger working adult pays a bit more for day-to-day bills while an older retired parent contributes by cooking meals or doing school pick-ups. The goal is fairness and avoiding resentment. And if a big financial move is involved – say, the younger generation is financing an extension or granny flat on the property – get it in writing. It might feel awkward, but drawing up a simple written agreement for major investments can save heartache later. (For example, families should discuss scenarios like what happens if the house is sold or if the son or daughter who built the granny flat wants to move out – will they be reimbursed for their contribution? ). Sorting out these details in advance, ideally with professional advice, keeps everyone protected and prevents nasty surprises.)
- Carve out private spaces. No matter how much family members love each other, everyone needs some personal space. The happiest multi-generational homes are those that manage to give each generation a degree of independence. This could mean renovating or reconfiguring the home to create separate zones – for example, converting a downstairs floor or garage into a self-contained apartment for the grandparents, or adding an extra bathroom and mini-kitchen for the adult child in the household. If you have the land, building a detached granny flat in the backyard is an excellent way to provide separation while staying close (and several states are making this easier with fast-track approvals – more on that shortly). Even smaller tweaks help: a second living room or rumpus area where the younger crowd can watch Netflix while the grandparents have quiet time, or vice versa, can do wonders. Privacy isn’t a luxury; it’s a necessity in a crowded household. Each person should have at least one place (even if just a bedroom or a study nook) where they can retreat and not be disturbed. Consider simple agreements like “knock before entering” for bedrooms, or set times when shared spaces like the kitchen or lounge are reserved for certain activities. These little boundaries go a long way in preventing irritation. As one seasoned multi-gen resident put it, “Having somewhere to quietly disappear to when things get too noisy – and noisy it will get – is a big plus.”
- Establish house rules and respect differences. Living with three generations can feel a bit like a share house crossed with a family reunion – there will be differing habits and expectations to navigate. Maybe the grandparents wake up at dawn, while the young adults keep vampire hours. Or one generation likes a quiet dinner table and another blares the footy on TV during meals. Discussing basic house rules can help: things like quiet hours, cleaning rotations, bathroom schedules, rules for visitors or parties, and how to handle disagreements. Be ready to compromise – everyone will need to give a little. Grandparents might have to accept a bit of mess or noise; younger folks might abide by an old-school courtesy or two. Communication is critical: if something’s bothering you (say, your dad keeps barging into your space without asking, or your adult son leaves the kitchen a disaster), address it calmly before it festers. Many families hold occasional “check-in” chats to air issues kindly. Remember, each generation grew up in a different era, so be patient with lifestyle quirks and find middle ground. As one multi-generational household guide notes, open and honest discussions – even the hard chats – are vital to living successfully together.
- Use tools to manage household finances and chores. Don’t underestimate the power of technology and a bit of organisation to smooth out daily life. Something as simple as a shared calendar app can coordinate everyone’s schedules (so grandpa’s medical appointments or the kids’ soccer games don’t clash with others’ plans). For splitting costs, consider apps like Splitwise or a shared spreadsheet where you log who paid for the latest grocery run, electricity bill, or Netflix subscription. This keeps money matters transparent and avoids one person feeling like they’re carrying others. Budgeting tools can help multi-gen families plan together – perhaps setting a collective savings goal (a renovation fund, or just a rainy-day emergency fund for the household). And for those little cash flow hiccups, new fintech solutions can provide backup. For example, PressPay – that lets employees access a portion of their earned wages before payday – can be a lifesaver if a family member needs a bit of extra cash mid-week. Rather than hitting up the Bank of Mum and Dad for a short-term loan, a working adult in the house could use a tool like PressPay to withdraw, say, $200 of their own paycheck early (for a small flat fee) and avoid awkward IOUs between relatives. It’s a modern twist on managing money that can keep the household equilibrium intact. Of course, any borrowed funds (whether from an app or a family member) should be used responsibly – the goal is to avoid debt spirals and resentment. Overall, being open about finances, leveraging available tools, and agreeing on a game plan will keep the multi-generational household running more like a well-oiled machine and less like a source of drama.
- Plan for home modifications and use support available. If your current home isn’t naturally suited to multi-gen living, consider what changes could make it more comfortable. Sometimes a bit of remodeling can transform a house: think adding an extra entrance, soundproofing a room, or installing a small second kitchenette or laundry so that each generation can be more independent. Australian governments are actually encouraging such arrangements through various initiatives. In Victoria, for instance, recent planning reforms let homeowners build a granny flat in their backyard without the usual council red tape – a big win if you need to create separate accommodation for grandma quickly. Western Australia has also jumped on board: WA overhauled its rules to remove minimum lot size requirements and extra parking bay mandates for building granny flats , making it much easier (and cheaper) for homeowners to add an ancillary dwelling for family. Other states like New South Wales have long permitted secondary dwellings “as of right” in residential zones, leading to a boom in backyard studios and granny flats – the number of these secondary homes in NSW roughly doubled in 15 years after planning rules were relaxed in 2006. If you’re thinking of extending or building, check your local regulations – you might be pleasantly surprised at the support (or even grants) available in 2025 for expanding housing on your property. For example, Queensland has a targeted First Home Owners’ Grant boost of $30,000 for new home contracts signed by June 2025, and interestingly this can even be used towards building a granny flat as a first home for an adult child ) ). It’s a creative way to help young people get a foot in the door: the child effectively builds their starter home in the parents’ backyard, funded partly by the grant, gaining independence while staying close (and adding value to Mum and Dad’s property). There are also government information resources to guide multi-generational families – from legal tips on “granny flat agreements” to advice on co-owning property. Taking advantage of these policies and resources can make multi-gen living more feasible and save money. Do your homework on what your state or territory offers in terms of approvals, grants or concessions for multi-generational setups; a bit of paperwork could yield a big payoff.
The Upsides: More Than Just Money
The driving force behind Australia’s multi-generational living trend may be financial, but the benefits go well beyond dollars and cents. Many families discover unexpected positives once they make the leap. Emotional support and closer relationships often top the list. Living together means built-in companionship: no one has to face life’s stresses alone, and there’s usually someone to chat with over a cuppa at the end of the day. Older family members often feel a renewed sense of purpose – instead of experiencing the loneliness that can come with ageing, they’re in the thick of family life, helping with homework or telling stories at the dinner table. Younger generations, in turn, get to really know their elders and learn from their experiences (and perhaps learn a bit more about their family heritage). One Brisbane mother, Irina, who lives with her husband, two daughters, and her in-laws, believes this arrangement solves a lot of the isolation and loneliness that people otherwise feel in modern society. In her case, it’s also helping keep her children connected to their cultural roots – growing up with grandparents from India means her kids naturally pick up the Hindi language and traditions in a way that wouldn’t happen if it were just the nuclear family. “It’s a win-win for everyone – isolated teenagers, isolated grandparents, together they are happy,” Irina says. And unlike struggling alone in a rented room, she notes that living with extended family “makes financial and emotional sense”.
Of course, any household – whether it’s two people or ten – requires give and take. Multi-generational living isn’t always easy, and it won’t suit everyone. But many Aussie families are finding that with a bit of sacrifice and flexibility, the benefits vastly outweigh the inconveniences. Yes, you might have to compromise on that spare room home gym, or tolerate Grandpa’s evening TV volume, or hash out shower times in the morning. But you also gain so much: the chance to achieve financial goals that would be impossible alone, the comfort of family in a turbulent world, and the joy (and sometimes chaos) of a lively, lived-in home. As one seasoned participant in a three-generation household put it, “A little sacrifice is all it takes, but the benefits are great.” In 2025’s challenging economic climate, that sentiment rings truer than ever. Multi-generational living is proving to be a resilient, if rediscovered, strategy for Australians to thrive together through tough times – and perhaps a reminder that when life gets hard, family can be our greatest asset of all.
Sources
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