Predicting the property market is as much art as science, but that doesn’t mean you need a crystal ball. By looking at the changing demographics of the Australian market, including where and how we live, we can make some predictions about the next ten years. Whether you’re buying an investment property or a home to live in yourself, understanding where the market is likely to trend can help. Whether you plan to rent it out or sell it for an eventual upgrade, here’s what to know about the Australia of 2030.
1. Smaller living spaces
The way we live today is changing. While the buyers of the 1970s and 80s were willing to go further afield for the big gardens and dual living spaces they craved, today’s buyers are making a different choice. Faced with ever-lengthening commutes to the quarter-acre block, Australians are increasingly choosing smaller living spaces instead.
Some of that choice is driven by necessity: outer suburbs are a lot further out than they used to be. Australians are also starting their families later, up from a median age of 25 for mothers in 1970 to 31 in 2019 and having less children when they do. Add to that an exploding gig economy that favours the inner cities, and increasingly busy lives that leave little room for weekend gardening, and it’s no wonder that small spaces are tipped to multiply by 2030.
Building data from the ABS backs this up, with building approvals for higher density housing up a whopping 36% since 2014.
2. Larger living spaces
Those people who aren’t choosing high density housing are going in the opposite direction: larger houses than ever before. Building Activity data from the ABS show that when it comes to a detached house, the more bedrooms the better.
The most common dwelling type in Australia is still the classic three bedroom detached house, representing around one-third of all occupied private dwellings. However, although the number of detached houses increased between 2011 and 2016 (the latest year for which we have data), the number of three bedroom houses declined by 94,000 (-3.3%). In the same period, houses with four or more bedrooms surged in popularity, their number increasing by almost 200,000 (11%).
This is the latest iteration of a longer term trend, in which houses themselves have become larger. Bedrooms aside, today’s homes include multiple living spaces – each of them bigger than in the past. In 1950, the average Australian house was around 100sqm. Today, despite smaller family sizes, it’s a huge 240 sqm.
It seems that the trend is firmly away from the middle ground, with savvy buyers either choosing small or sprawling. With builders becoming more efficient every year, the choice is likely to continue.
3. Low maintenance living
Our busy lifestyles and long commutes mean that we’re spending less time at home than ever before. Whether we’ve gone for a small or a large house, low maintenance is key. Families want homes that don’t require a lot of upkeep on already crowded weekends, with a consequent focus on easy care builds.
Rising heating and cooling costs, and a growing awareness of environmental issues, have also seen a trend towards houses designed for the climate. Passive design principles including orientation and ventilation are increasingly important, as are low water gardens, insulation and renewable technologies like solar panels. And if you’re buying an investment property to rent out, the lower running costs and minimal upkeep are a huge bonus for both you and your tenant.
There’s every indication that all of these issues, from time poverty to environmental concern, will continue to grow and influence people’s lives over the next decade. Buy a low maintenance home and rest easy in the knowledge that your property will benefit from demand.
4. Growth in regional centres
For those who don’t fancy apartment living but don’t have a cool million dollars to spend on a home, regional centres offer a possible solution. In fact, more than 400,000 people moved from capital cities to regional areas between 2011 and 2016, and recent price booms indicate that if anything, the trend is accelerating.
A report from the Regional Institute of Australia also reports that the most common age groups of people moving to the regions were 60 to 69 year olds seeking an affordable retirement, and 30 to 39 year olds wanting space to raise their families. This latter group are the main driver of regional growth, with more likely to follow.
Historically, one barrier to a regional move has been the relative lack of infrastructure and lower employment rates. The Government has signaled a willingness to invest in both, making regional Australia increasingly attractive overt the next decade.
Of course, a property purchase is always a personal decision, and the best house to buy is the one that’s best for you. However, it’s a long term investment, so keep one eye on the future and you’ll be well guided in the present.