Life changes for the property investor to understand
Today we are reading about how the housing boom is changing the way Australians live, quite important life changes for the property investor to understand for successful investment.
(Please contact us at [email protected] for further information or the chance to discuss this and other issues in the comfort of your own home)
It hasn’t been a “long boom” as the writer describes it in the article link below but we certainly have seen significant price growth in our two largest cities, which not surprisingly, has some effect on the way we live and our behavioural changes.
Most of these changes would be very predictable we spent the time to think about them, but the primary question for the property investor should be how important it may be to understand the impact these demographic/life changes have on the demands of certain types of property?
- The most obvious change is that we are finding that young adults to live in the family home for longer than in the past. We also have what has been described as the “boomerang generation” – the chicks leave the home only to return when they have to face the economic realities of not living with mum and dad. This trend is now showing up clearly in Australia’s demographic data.
- Closely related with the above, is the fact that home ownership rates among those between 25 and 45 years has fallen markedly during the past two decades. If that decline is not reversed, the proportion of life-long renters in Australia will grow.
- There has been a huge shift towards high- density living in our big cities. I’d comment that it is incorrect to assume that this is because of the price of well-located urban land increasing relative to incomes. I’d suggest it has a lot more to do with the choice the young in particular are making for the city and city-fringe lifestyle as well as the increasing number of older Australians who are downsizing into more manageable city units. It is interesting to note that 51 per cent of all dwelling approvals in Australia were for multi-unit houses and 62% in Sydney! Unsurprisingly, the number of small cottages with a yard is in decline.
- House price movements have a “clear and consistent” influence on how much some people work. The economists recon there is a tendency for older females in particular to use any unexpected wealth gains from house prices to retire early.
- High property values also affect the work choices made by younger women and men. Those between 20 and 40 years who own property cut back their hours of work, on average, following strong gains in housing wealth. At that formative stage of the family life-cycle many young couples use housing wealth gains to help manage the juggle between work and family.
- There is another pretty predictable change – as prices rise, homeowners take on more debt.
You can read more about this here: http://www.smh.com.au/comment/how-the-housing-boom-has-changed-the-way-australians-live-20161011-grzoe1
If you want to know more about how these changes can affect your property investment choices contact us at [email protected]
Or even better, why not give us a call at LIME and we’ll be happy to discuss with you.
