Who wants to live where

Is it possible that the demand for apartments might slow in favour of houses as many in the 20 to 34-year-old bracket move onto the next stage of their lives, that point when partners, children and pets all create a desire for a bit more space? More significantly, they want a yard to play in.

Millennials are considered as those born between 1982 and 2002, so the millennial age range roughly covers anyone aged 18-37 today.

Some of those on the move may be in the demographic cohort that follows the baby boomers and precedes the millennials. This is Generation X or Generation Y (some think of Gen Y as a subset – in a sense, the older Gen X group). Typically, this refers to birth years from the early 1960s to the early 1980s, people roughly in 37 to 57 age group today.

The gist is that the older millennials and first decade of Gen X are the ones looking to live in houses over apartments.

What about the over-65s? What have they been doing? There was a lot of talk about this age group downsizing, which includes moving into apartments, but now it seem there’s not as much evidence of this as predicted. Many don’t want to leave their houses.

It is fair to say that those in their 20s and early 30s have been conspicuous in their occupancy of units and apartments in the inner and middle suburbs of major cities, and mainly as renters. The question is whether they will still want to live in medium and high-density dwellings when they are in their late 30s and early 40s.

If it’s not the case, then there will be higher demand for detached houses, new and established, which will impact on land developers, builders and building materials suppliers.

However, there is another school of thought that suggests apartment dwellers are growing to like living in apartments and don’t necessarily want to move on to houses. In this scenario, the average age of those living in apartments will increase.

It will also drive demand for apartments that suit families, with pets and young children growing into adults. They will appreciate more indoor and outdoor space, or at least be located adjacent to public outdoor spaces.

People in their 30s and 40s may be even more into renovating than today, either tailoring their existing home to suit a changing house hold or buying a property to renovate.

While the demand for townhouses, units and apartments is less strong in regional areas, it’s possible that homebuyers will be drawn to these in larger regional centres in the future, if affordability and employment opportunities stack up.

What all this says it that the real estate market is not static and is unlikely to ever be. Buyers and sellers are always active as their housing needs change throughout their lives. People will always need shelter.

SOURCE: RE/MAX Australia