But what is the life of an Australian when it comes to property ownership? Does the quarter acre block with the backyard and front garden still exist? Or have Australians accepted the big city mentality and moved into apartments?
The truth is that it is all of this and more. Australia’s demographic and psychographic profiles are changing and so are the ways in which we live.
Young, middle-aged, elderly, children, no children, single, married, divorced, it doesn’t matter what the category, Australians are choosing to live the lifestyle they want according to their needs and wants.
The shift for Australians from houses to apartments
Due to the vast geographical size of Australia, it became natural for Australians to buy a home in which they could marry and raise a family.
This was pushed by Sir Robert Menzies as Prime Minister during WWII where he stated that the middle class were the ‘the strivers, the planners, the ambitious ones’.
Home ownership rose to 50 per cent in the 1950s and peaked to over 70 per cent for the four decades afterwards. However, recent Australian Bureau of Statistics (ABS) data shows home ownership now sits at 67 per cent and is falling against trends identified by the Organisation for Economic Co-operation and Development (OECD).
Recent LJ Hooker research reveals that 14 per cent of dwellings in Australia are apartments, with the majority being located in Sydney (37 per cent), Melbourne (21 per cent) and Brisbane (8 per cent). While high-rise units (greater than three storeys) made up 4 per cent of all dwellings in 2011, it’s double what it was in 1991. Terraces, villas and the like account for almost 10 per cent.
In the 1990s there were three houses approved for every apartment, according to ABS data. Now, it is 1.5 houses for every apartment building approved.
1. Rise of the rent and investor
Another increasingly common trend is the young couple in their late 20’s or early 30’s who love their lifestyle and don’t want to relocate from where they are renting. The problem is that they can’t afford to buy in the area. Rather than disrupt their lifestyle, they tend to buy property, either closer to where they grew up or in a more affordable part of the city, that has been identified as a growing area; therefore becoming, what we call, rent and investor.
2. Rise of the home developer
With state governments and local councils relaxing planning laws, there is an increasing trend for the homeowner to build a granny flat out the back or knockdown the family home in order to build a duplex. This is increasingly common for elderly couples who no longer have children or the savvy investor who wants to make maximum capital extraction from their block.
The increased income from selling the remaining duplex means many couples can be debt free years earlier than they would otherwise be, or even live off the proceeds to self-fund retirement.
3. Baby boomers migrating back to the city
As the children grow up and eventually leave home, and once the baby boomer settles into retirement, they have no need to live in such a big house with big, high maintenance backyards and pools. They are constantly looking for things to do and the appeal of being on the fringe of the city, with an apartment that doesn’t require a lot of upkeep, possibly can be paid for with cash following the sale of the family home. Smaller housing with less upkeep also leaves them with plenty of spare time on their hands to do the things they enjoy.
4. Families living in apartments
More and more we are seeing young families raise their children in apartments. This is due to a combination of affordability and practicality due to work. Parents can’t afford to spend too much time travelling and want their children to be near the best educational and medical facilities and schools with access to the widest array of amenities. Also, developers have become smarter in how they design apartments and use space. Local councils have also put in place mandatory green space requirements creating low maintenance ‘backyards’ for kids to play in.
5. Migration influences on the (New) Australian Dream
Australia is a country of immigrants with a long history of attracting people from all over the world who seek out this vast land for a better life. Part of that dream involves owning their own home and building a life around that to support your family. Immigrants will search long and hard to find a place in which they are comfortable living in and a community that will welcome them. They want to feel at home in their new adopted country.
Net overseas migration continues to be the biggest driver of population growth in Australia. According to the latest ABS data (September 30, 2012), net overseas migration accounts for 60 per cent of the population with natural increases making up the remaining 40 per cent. This increases the pressure on housing around the country as every new settler holds the dream of owning his or her property to seek out and make their own, which in turn influences the continual evolution of the New Australian Dream.
Australians have always loved purchasing real estate – it is part of our psyche – and will never change. What has changed though is the type of home that we purchase. In a faster, ever-changing world, Australians want everything at their fingertips and they want their lifestyle to remain uninterrupted while they pursue whatever activity they need or desire.
Purchasing apartments is appealing to the young, middle-aged and elderly across all demographics. But that doesn’t mean purchasing a house has been forgotten or is now an unattainable dream. It just means whatever your preference for your style of living; it is fast becoming the ‘new norm’ for Australia and the New Australian Dream.