The great Aussie dream used to be a house on a quarter acre yard filled with trees, but this is changing. New buyers and even the baby boomers are choosing apartment living.
According to a study commissioned by the Reserve Bank of Australia, which indicated that, there was a bigger demand for apartments in major cities as compared to houses in suburb locations. In fact, apartments that were constructed in 2016 accounted for about one third of all residential building approvals.
First-time homebuyers and their wallets
Simply put, the cost of a house is just out of the reach of many youngsters. They are already struggling to balance their lifestyle and debt with their salaries, never mind saving up for a deposit. An apartment is just more affordable. In fact, the average price of an apartment is around 30% less than that of a detached house. Also, many working people are finding it cheaper to live and work in urban areas, as they can save on fuel and spend less time in traffic and more with their families.
Baby boomers are downsizing
Australia has an aging population, and many baby boomers are entering their retirement years. To make it easier for them, they are downsizing, in fact, 43 % of Australians between the ages of 50 to 59 have downsized, according to the Australian Housing and Urban Research Institute. Yet by downsizing, they can free up some funds to put to their retirements, but most of all they can have less expenses.
People want an urban vibe
It is not just the millennials that are craving that urban lifestyle, many baby boomers are too. Yep, they want that access to shows, drinking expensive coffee and eating avocado toast. The only difference between these two age groups are how they approach buying an apartment. Many of the richer, older people are moving into oversized luxury apartments and some youngsters are using rentvensting to afford their lifestyle. Rentvensting means these youngsters are buying what they can afford somewhere else and renting where they want to be in the city.
But is this new Aussie reality becoming the new dream for future generations?
Australia’s housing crises, its aging population are all factors driving this trend towards apartment living. But this is a reality in most developed countries.
What sets Australia apart is that even though more people are moving into apartments, it does not mean Aussies are giving up on space. It might not be the quarter acre plots, but the new dream will be those luxury-oversized apartments.