Millennials are a digitally savvy generation, going online to shop, socialise and work. So it is little surprise they would seek out digital alternatives in real estate, too.
In the McGrath 2022 Report, John McGrath has analysed the trends of millennials using digital tools to assess the property market, and relying on apps to find everything from listed properties to financing options.
Born between 1980 and 1996, millennials now make up the largest proportion of Australia’s population at 22 per cent, and account for 35 per cent of the modern workforce.
Research from Realtor in 2019 indicated 92 per cent of millennials frequently use the internet to search for homes.
In fact, Domain and realestate.com.au both rank in Australia’s top 200 top grossing apps, ranking at 119th and 132nd respectively.
Mr McGrath also noted this could account for the increase of property technology offerings on the market, with 381 PropTech companies in Australia.
“It’s no surprise that millennials do things differently to their parents,” Mr McGrath wrote.
“They delay marriage and children, they spend more years studying and they do more part-time work. It is also common for both parents within millennial families to work to help service their mortgage.
“Goals around property ownership have shifted, too. House prices have increased at a much faster pace during the lives of Gen Ys.”
While Mr McGrath believed millennials were also earning more than previous generations, Australians take an average of 8.6 per years to save a 20 per cent deposit, according to CoreLogic, showing the high barrier to home ownership.
The issue of affordability will cause home ownership for millennials to drop to just above 50 per cent in 2040, down from 60 per cent in 1981, according to the Australian Housing and Urban Research Institute (AHURI).
But Mr McGrath noted millennials were finding new ways to adapt, including getting assistance from their parents or ‘rentvesting‘.
The recent prevalence of working from home has also allowed millennials to broaden their search area away from more expensive inner-city districts.
Social demographer, Bernard Salt said coronavirus has brought forward the demographic shift of ‘hipster millennials’, who gravitated to inner city apartments in their 20s to pursue their careers, and are now leaving these areas ahead of their time.
“Today’s white-collar workers can live anywhere with reliable broadband and the NBN is expanding their options,” Mr McGrath said.
“Millennials are relishing the chance to genuinely design their own lives, which includes buying a ‘grown-up’ house where they can put down roots long term.”
ABS data showed that people aged 25-44 years are the second largest age cohort leaving capital cities, behind the 45-64 year olds.
That’s when good neighbours become good friends
With more millennials and young families moving to suburban or regional areas, Mr McGrath believes Australia is seeing the classic neighbourhood re-emerge.
“We have returned to a way of life enjoyed by generations past, where we know our neighbours’ names, our children play together in the streets, and local businesses have an important role in our community,” Mr McGrath said.
Among multiple generations, the desire to live in the inner-city circle to reduce commute times isn’t relevant, so lifestyle has become many Australians’ first priority.
According to the Journal of Community and Applied Social Psychology, mental health and wellbeing is positively influenced by community belonging and togetherness during disaster. They expect relationships to be strengthened due to communities’ feelings of unity in response to the pandemic.
The growing focus on staying local has also amplified the benefits of the ’20-minute neighbourhood’ standard of urban planning.
This ideal allows residents access to shops, services, schools, public transport and employment within a 20-minute walk.
The grass is always greener
Residents of such neighbourhoods not only enjoy convenience but also better health because they are walking more often and generally spending more time outdoors, according to University of NSW professor Linda Corkery.
“Residents of these neighbourhoods often have a strong sense of community and connection to place,” she said.
There has also been increased usage of green spaces in inner-city and metro areas for exercise and recreation, with gyms closed and local sporting activities cancelled.
Melbourne saw an increased usage of 112 per cent, while Sydney increased by 36 per cent and Brisbane by 17 per cent in the first few months of the pandemic last year, according to PWC.
What’s more, green spaces have a positive influence on housing prices. This is particularly the case in higher density areas, where proximity to parks and reserves is more important.
CoreLogic research indicated the five Sydney areas that have the highest percentage of public green space are:
- Heathcote-Waterfall
- Berowra-Brooklyn-Cowan
- Terrey Hills-Duffys Forest
- Asquith-Mount Colah
- Menai-Lucas Heights-Woronora
The top housing price growth areas in Sydney include:
- Sylvania Waters (Sutherland Shire) up 64.8 per cent to a median $2,720,000
- Bardia (Campbelltown LGA) up 62.5 per cent to $703,900
- Catherine Field (Camden LGA) up 53.2 per cent to $678,000
- Glenorie (Hills Shire) up 48.3 per cent to $1,930,000
The NSW Government found young buyers are favouring affordable suburbs in Sydney’s west and southwest, including:
- Box Hill
- Schofields
- Austral
- Oran Park
- Campbelltown
- Wentworthville
- Liverpool
- Favourite regional suburbs include Hamlyn Terrace and Gosford on the Central Coast
and Wollongong on the south coast.
