How Millennials Impacted Australia’s Real Estate Market
Millennials are a digitally savvy generation who go online to shop, socialize and work. It is therefore not surprising that they are also looking for digital alternatives in real estate.
In the McGrath 2022 Report, John McGrath analyzed millennial trends using digital tools to assess the real estate market, leveraging apps to find everything from listed properties to financing options.
Born between 1980 and 1996, millennials now represent the largest proportion of Australia’s population at 22% and represent 35% of the modern workforce.
A 2019 Realtor study found that 92% of millennials frequently use the internet to search for homes.
In fact, Domain and realestate.com.au both rank in Australia’s top 200 most profitable apps, ranking 119th and 132nd respectively.
Mr McGrath also noted that this could explain the increase in real estate technology offerings in the market, with 381 proptech companies in Australia.
“It’s no surprise that millennials do things differently than their parents,” McGrath wrote.
“They delay marriage and children, they spend more years studying and they do more part-time work. It’s also common for both parents within Millennial families to work to help pay off their mortgage.
“The goals for real estate ownership have also changed. House prices have increased at a much faster rate over the lifetime of millennials. ”
While Mr McGrath believed millennials also earned more than previous generations, Australians take an average of 8.6 per year to save a 20% down payment, according to CoreLogic, which shows the high barrier to home ownership. the property.
According to the Australian Housing and Urban Research Institute (AHURI), the issue of affordability will cause homeownership for millennials to drop to just over 50% in 2040, down from 60% in 1981.
But Mr. McGrath noted that millennials are finding new ways to adopt, including getting help from their parents or “rentvesting.”
The recent prevalence of working from home has also allowed millennials to expand their search area away from more expensive inner-city neighborhoods.
Social demographer Bernard Salt said the coronavirus has advanced the demographic shift of ‘hipster millennials,’ who have turned to downtown apartments in their twenties to pursue their careers, and now leaving those areas ahead of the curve. their time.
“Today’s white collar workers can live anywhere with reliable broadband and the NBN is expanding their options,” said McGrath.
“Millennials relish the chance to truly design a life of their own, which includes buying a ‘grown up’ home where they can put down long-term roots. “
ABS data showed that people aged 25 to 44 are the second largest age cohort leaving capital cities, behind 45 to 64.
That’s when good neighbors become good friends
With more millennials and young families moving to suburban or regional areas, McGrath believes Australia is seeing the classic neighborhood reappear.
“We have returned to a way of life enjoyed by generations past, where we know the names of our neighbors, our children play together on the streets and local businesses have an important role in our community,” said Mr. McGrath.
Among several generations, the desire to live in the inner city circle to reduce commuting times is irrelevant, so lifestyle has become the top priority for many Australians.
According to the Journal of Community and Applied Social Psychology, mental health and well-being are positively influenced by community belonging and togetherness during a disaster. They expect relationships to be strengthened because of communities’ feelings of unity in response to the pandemic.
The growing desire to stay local has also amplified the benefits of the “20-minute neighborhood” urban planning standard.
This ideal allows residents to access shops, services, schools, public transport and jobs within a 20-minute walk.
The grass is always greener
According to Linda Corkery, a professor at the University of NSW, residents of these neighborhoods enjoy not only amenities but also better health as they walk more often and generally spend more time outdoors.
“Residents of these neighborhoods often have a strong sense of belonging to the community and to the place,” she said.
There has also been an increased use of green spaces in city centers and metropolitan areas for exercise and recreation, with gyms closed and local sporting activities canceled.
Melbourne saw a 112% increase in usage, while Sydney increased 36% and Brisbane 17% in the first months of the pandemic last year, according to PWC.
In addition, green spaces have a positive influence on house prices. This is particularly the case in areas of higher density, where proximity to parks and reserves is more important.
CoreLogic’s research indicated that the five areas in Sydney that have the highest percentage of public green space are:
- Terrey Hills-Duffys Forest
- Mount Asquith Colah
- Menai-Lucas Heights-Woronora
The main areas of house price growth in Sydney include:
- Sylvania Waters (Sutherland Shire) Up 64.8% to Median of $ 2,720,000
- Bardia (Campbelltown LGA) up 62.5% to $ 703,900
- Catherine Field (Camden LGA) up 53.2% to $ 678,000
- Glenorie (Hills Shire) up 48.3% to $ 1,930,000
The NSW government found that young shoppers preferred affordable suburbs in Sydney’s west and south-west, including:
- Box hill
- Oran Park
- Preferred regional suburbs include Hamlyn Terrace and Gosford on the central coast
and Wollongong on the south coast.