It really wasn’t that long ago that the ‘Great Australian Dream’ was easy to define.
A large family home within suburbia did the trick, with a great big yard to raise the family and a pool to boot.
Then over the last few decades this dream morphed to include an oversized mansion with a media room and a home office.
And now, with changes in the global marketplace and the evolution of technology, we are seeing another shift in the traits of the modern Aussie home buyer, who live an entirely different lifestyle to the previous generations.
A new way to work and live
The advances in how we work have changed. In fact, even the nature of when and where we work has also dramatically shifted.
The pace of life has quickened and there are more of us entering into a highly competitive corporate arena, supported by global connectivity.
The emergence of the flexible work environment has also shifted the way we live, how we spend our downtime, our ideals about life and major decisions, such as when to start a family.
Put simply, property is about people
Of course, property fulfils the basic necessity of shelter and comfort.
That’s why demographics – how many of us there are, how we live and where we want to live – is a major driver of our property markets.
This means understanding the way our changing demographics affects our current and future housing needs is fundamental to successful property investing as it will give you a competitive advantage when it comes to asset selection.
It is also interesting to see how the fast pace in which we live has affected the market cycles, with the peaks and troughs becoming more frequent and reactive.
Furthermore, there is now so much information freely available to us, that it’s easy to get carried away with media hype, headlines and opinions.
You know what they say about opinions? They’re like belly buttons – everyone has one but, in general, they’re pretty useless.
Anyway…while property may be about people, successful investing is about longevity – and the ability to ignore the ‘noise’ and focussing on the bigger picture and investing for the long term, rather getting side tracked by all the “white noise” will put you in the best position for lasting success.
Phases of Aussie property buyers:
As I said, understanding our changing demographics and particularly what property buyers need, and more importantly want they want, is critical to investment success.
So let’s look back and see how property buyers’ evolved in their behaviours and purchase decisions:
- In the 60s and 70s the early Baby Boomers strived to achieve more from life than what their parents had.Rather than living in the inner suburbs (where there was still a lot of industry) they moved to the new outer suburbs assisted by improving infrastructure, public transport and freeways which meant commuting was easy back then.
- The 80s. The desire to ‘have it all’ personified the 80s and subsequently, size meant status and was a big benchmark.The suburban family home morphed into mega-mansions, and we saw the rise of new housing estates swallowing up acres of farmland and an accelerated demand for housing construction.
- The Nineties. Urban sprawl became a real concern as new suburbs began to take shape across the outer edges of most major cities, and our levels of government were prompted to drive the infrastructure needs of these satellite cities.The ‘recession we had to have’ struck in the early 90s, but as the cycle moved on home buyers returned as did property investors who found the new vogue of inner city apartment living, especially in Sydney, an attractive investment proposition.
- The early 21st The Australian landscape changed drastically, as the world became increasingly accessible and employment moved further from the manufacturing and industrial sectors to emerging sectors, such IT and the online marketplace.An emphasis on education, career and lifestyle saw the average Australian household shrink from 4.2 to 2.6 residents, the traditional nuclear families trumped by career-focused singles who decide to delay starting a family.
Small houses, big dreams
McMansions and homes on big blocks will always have their market, but with more one and two people households, the aging population trend and the emergence of ‘new arrivals’ to our shores’ (many of whom originate from countries where apartment living and smaller homes are the cultural ‘norm’), the homes we desire are changing in response.
Planning has already started to favour medium to higher density development in favour of urban sprawl.
Homes are getting smaller and time-poor residents are increasingly seeking lifestyle, convenience and amenities at their fingertips, whilst living in smaller and easier to maintain modern abodes.
In a nutshell, the Great Australian Dream is downsizing.
As a property investor, it’s important to carefully think about asset selection in terms of the type of property and location that will still be in continuous strong demand in 10-20 years from now.
Good quality, blue chip property locations will never fall out of favour, but don’t discount apartments or townhouses in these suburbs.
People are trading their back yards for court yards and balconies.
A well-appointed inner suburban apartment in a small, boutique block or a townhouse with a private courtyard could just be what the market desires, now and in the future.