The property landscape in Australia is changing with each generation – and, along the way, the Great Australian Dream of owning your own home is being redefined.
According to the recent Connected Future Report published by CommBank, our priorities are shifting.
The Baby Boomer generation tended to prioritise houses on large blocks of land in the past, but new generations seem to look towards smaller properties on smaller blocks.
Modern, high quality homes in high demand
But it’s not just any home that the modern buyer will settle for: today’s generation of young buyers want high-quality, architecturally designed dwellings that maximise space, without the stress and time investment in managing a big garden on a huge block.
Apartments have also increased in popularity, especially amongst those looking to reside near a city centre, as these modern city hubs become more crowded.
Whilst older generations preferred homes with good-sized backyards, younger buyers would rather see additional rooms and floor space for home offices, private gyms and home theatres where they can entertain, Commbank’s research shows. Rather than having their kids play in their own backyards, the new generation of parents prefer to consider suburbs with amenities such as neighbourhood parks, ovals and sports fields instead.
The report reveals that the majority of first homebuyers are aged 25-34 (57%), with almost a quarter (24%) aged 35-44, and a further 7% aged 45-54 when buying their first home.
People are buying their first home later in life.
Rising property prices and claims of unaffordability are the reason that first home buyers are statistically getting older. With values soaring in competitive markets like Sydney and Melbourne as demand increases, people are finding it harder than ever to achieve the goal of home ownership – so it’s becoming a case of “better late than never”.
Buyers are also willing to compromise with an apartment or townhouse, if it means they’ll get into a property sooner, as now more than ever, proximity is also becoming key.
Buyers will prioritise an apartment in a location closer to the CBD over a freestanding house in the suburbs, with more first homebuyers opting for flats, units or apartments. In 1995/96, just 7% of first homebuyers purchased medium- or high-density housing, a figure that almost doubled to 13% by 2009/10, and to 15% by 2016/17.
Understanding these trends is invaluable for smart investors with a long term view. They try to work out what the market is going to be like when they sell, not what it is today.
Just 15 years ago, every property expert would happily go on record to state that property wealth is all generated in land; buying a house on a big block of land was always considered the superior move.
In less than two decades, the way we live has shifted so dramatically that apartments and townhouses have surged in popularity. When you’re building wealth for the long term, you need to be thinking about the types of property you can buy now to suit the needs of tenants and buyers alike in the future. Increasingly, research is showing us that smaller yet high quality properties in central locations are set to be in demand for the long-term.
Of course, buying property to suit your strategy is a very personal decision and is influenced by a number of factors, including your income and borrowing capacity, your risk appetite and your investing timeline. When you’re unsure about where (or what) to buy, having an experienced advisor on your team can help you figure out how to play to your strengths as an investor. If you would like help to create a solid financial pathway forward, please contact us at Multifocus Properties & Finance for an obligation-free chat on 1300 266 350.
Where are house prices heading in the next 12 months? Get NAB’s predictions here.