Invest
Priority shift: Millennials set to favour property over lifestyle
Millennials are often described as lifestyle-focused, but a real estate executive predicts this will change within five years as Millennials enter the property market.
Priority shift: Millennials set to favour property over lifestyle
Millennials are often described as lifestyle-focused, but a real estate executive predicts this will change within five years as Millennials enter the property market.
According to First National data, 74 per cent of Millennials currently require “more help than usual in understanding the buying process”. Despite this, 66.1 per cent of Australians born between 1982-2002 will choose property over lifestyle.
First National Real Estate Australia CEO Ray Ellis said that the next five years will see Millennials’ spending power “eclipse” that of the Baby Boomers, with most focusing on buying property that meets their lifestyle desires and financial situations.
Speaking yesterday, he said: “The expectations we have for Millennials from 2018 onwards is based on our members’ observations, which mirror that of data we are seeing from the US.
“The next five years will see the most spending power of Baby Boomers eclipsed by Millennials, with the majority focused on buying apartments as their first home — moderate commutes to work will be acceptable but the majority will not find the outer suburbs of metropolitan areas very appealing. In essence, Millennials are driven by lifestyle.”
Continuing, he said that the current norm is now: “I want it, I’ve earned it, I can have it.”
He said the lifestyle changes that used to be a prerequisite for investing in property are “no longer mandatory”.
However, the property Millennials buy will be their homes for, on average, six years before they move into something better.
Internet connectivity is an important factor for young Australians buying homes and this generation is also more likely to consider whether their property is “picture-perfect” by doing research online.
According to First National: “[Millennials] regard internet speeds and choice of telecommunication providers as incredibly important to assessing a potential home.
“Television lifestyle shows also play a role in their real estate requirements with current home styling and design trends high on the must-have list.”
This cohort is also more likely to choose homes close to their work, and homes that are “move-in-ready”, rather than properties which require renovation.
Forty-eight per cent of Millennials prefer to buy new homes and avoid plumbing or electrical issues, compared to 34 per cent of other demographics.
The real estate group said Millennials are making more money than previous generations, with buying budgets predicted to be “well above those of Generation X and Y”.
“It won’t be unheard of for some to make their first purchase in the realms of $500,000 to $750,000.”
Millennials are earning more, but is housing actually more affordable?
First National’s claims that Millennials are getting paid more than previous generations come as another report argues there are no “affordable” housing markets in Australia.
The 14th Annual Demographia International Housing Affordability Survey revealed that in the late 1980s, Australia’s price-to-average household income ratio was below 3.0. This means that it would take three average incomes to buy a property.
Currently, Sydney’s average property price-to-average household income ratio is 12.9.
According to the report, this is “the highest ever recorded outside Hong Kong in the Demographia International Housing Affordability Survey”.
It continued: “Sydney is again Australia’s least affordable market, with a median multiple of 12.9, and ranks second worst overall, trailing Hong Kong.
“Sydney’s housing affordability has worsened by the equivalent of 6.6 years in pre-tax median household income since 2001. This is a more than doubling of the median multiple. In contrast, Sydney’s housing affordability [decreased by a quarter as much] between 1981 and 2001.”
After Hong Kong, Sydney was the second most unaffordable city. Melbourne was the fifth most unaffordable major-market city. Adelaide was described as “severely unaffordable”.
The report said: “There are no affordable or moderately affordable markets in Australia.
“Overall, 15 markets in Australia are rated severely unaffordable.”
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more
Property
House values dragged down in latest index
A new set of figures outlining the present state of Australia’s residential property market has been released, indicating a bleak outlook for growth in metropolitan areas as the Reserve Bank of Aust...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more
Property
House values dragged down in latest index
A new set of figures outlining the present state of Australia’s residential property market has been released, indicating a bleak outlook for growth in metropolitan areas as the Reserve Bank of Aust...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
