Back in March, The AFR has published a propaganda piece claiming “Millennials don’t want to buy Boomers’ sprawling, multi-bedroom homes”:
Boomers and Millennials also want very different types of houses…
Fifteen years ago, Boomers were building large, elaborate houses in states like Arizona, Florida, North Carolina, and South Carolina, The Wall Street Journal reported. Now, faced with the effort of maintaining such houses, they’re looking to downsize.
The only problem? Young people aren’t interested in buying their houses, according to the Journal…
Hilariously, a separate article from the WSJ claims the exact opposite, with interest in exurban single family homes booming:
The exurbs, the engine of the American housing market, are back…
Analysis by the National Association of Home Builders, set to be released later this year, shows that single-family construction rose nearly 7% in exurban areas in 2018 compared with a year earlier. Home building overall rose less than 3% in the same period. The group defines exurbs as outlying counties in major metropolitan areas…
In recent years, millennials have driven demand for rental apartments in downtown areas. Some in the industry thought this could be a permanent phenomenon. And yet, as they begin to marry and have children, millennials are proving like generations before them that they are willing to move to more affordable outlying areas.
Today, Interest.co.nz has published results from a Westpac commissioned survey, which shows that most New Zealanders still pine for a home with a backyard:
The Nexus Planning & Research survey of 1,008 people aged 18 and over shows 49% consider a backyard essential when buying a home, and another 42% think one would be nice to have.
“It’s interesting to see that people consider having a backyard much more important than living close to work, public transport, parks or schools,” says Westpac’s Robert Hill.
“Owning a home with a nice backyard has traditionally been central to the Kiwi dream, and the recent rise in house prices and increase in apartments doesn’t seem to have dented that.”
I can count on one hand the number of Millennials that I have met that would prefer to live in an apartment over a house, if given the choice.
The reason why they are increasingly living in an apartment is not by choice, but rather necessity. They have been forced into apartment living because that is all they can afford. Apartments also tend to be rented, rather than owned:
While apartment living might be fine when living as a single or a couple, it is a sub-optimal choice when it becomes time to have a family. And this is a problem because Millennials are being locked out of family friendly homes, according to BIS Oxford Economics:
Investor demand has seen apartment construction boom — particularly in Sydney, Melbourne and Brisbane — but Mr Zigomanis said the studio, one and small two-bedroom apartments that are attractive to Generation Y as they rent in their 20s are unlikely to hold the same appeal as they age…
The large-scale, high-rise developments that sell apartments off the plan to investors do not hold the same appeal to owner-occupiers…
The growing over-65s segment of the population is not tipped to favour smaller apartments either.
BIS notes downsizing has been growing at a “glacial” pace and, even if it picks up, demand is not expected to be fulfilled by small, high-rise dwellings.
“Previous research that we’ve undertaken suggests that many baby boomers would still like to stay in the area that they’re living in, where they’ve already made friends and social connections,” Mr Zigomanis said.
The situation looks particularly dire in Sydney, which is Australia’s immigration capital. According to projections from the Urban Taskforce, apartments will make up half of Sydney’s dwellings mid-century, whereas only one quarter of Sydney dwellings will be family-friendly detached homes:
That’s the death of The Australian Dream right there.
- Final auction clearance rates bounce off thin volumes - May 28, 2020
- ABS: 72% of businesses suffer COVID-19 revenue falls - May 28, 2020
- Australia’s regions hit hardest by COVID-19 job losses - May 28, 2020