Apartment buyers - The Brady Bunch vs Seinfeld
Apartment buyers - The Brady Bunch vs Seinfeld
In recent years there has been a material shift in the Australian housing market. Many occupiers and investors are choosing apartments over detached dwellings, particularly in our cities.
Significant home price increases have meant that many first time buyers find apartments a more affordable alternative to a freestanding home - so of course price matters. But are there other factors influencing our housing preferences?
We think the answer is definitely yes. Here are some of our observations.
Changing expectations.
Many households are making very intentional lifestyle choices when it comes to housing. People are increasingly mindful of the tradeoffs between :
location,
travel and transport requirements to work, family & friends or recreation,
'close to home' lifestyle assets, and
the costs of maintaining and renovating an existing older dwelling.
Location
After the lifestyle shocks caused by the Covid pandemic, we are all much more aware of the importance of location. Living close to places or people we like has become much more important to many people. Property buyers are happily making clear tradeoffs between the traditional outer suburban 'entry point' freestanding dwelling (does that exist any more?), and a more centrally located apartment close to urban amenities and lifestyle. Many buyers don't see this as a compromise - in fact. a lot of first (and second, third) time buyers are actively choosing inner suburban or city apartments because they see the city or the local surroundings as their back yard.
[It has been suggested that Gen X or older homeowners grew up watching The Brady Bunch, Neighbors, or Malcolm in the Middle - where it seemed most people lived in freestanding detached houses, and the expansive detached dwelling became aspirational. Millennials, by comparison, might have grown up watching Friends, Seinfeld, or How I Met Your Mother - where vibrant inner city apartment living was on show. Has this influenced our choices? Hard to say!]
The significant urban renewal that is taking place almost continuously in all State capitals, and in recent decades in major regional centres like Newcastle or Geelong, has made these urban locations much more livable and attractive to home buyers. The increasing demand (and steady growth in property values) in turn attracts private and public investment - and buyers make the clear choice to buy in these location and either commute to major centres, or work from home. Strong employment markets often mean well paid jobs are available in the major regional centres - so commuting becomes less relevant. The location and lifestyle factors combine to make the major 'satellite' cities like Newcastle a genuinely attractive option for occupants and investors alike.
Travel and transport
Increasing population + congestion + work from home = people being much more sensitive to transport's impact in their lives. Not only the dollar cost - the cost in time, hassle, and convenience. Our team contacts hundreds of buyers every week - and we are seeing a lot more people choosing to live in locations where they can avoid extended rush hour bottlenecks so they can get home to take kids to sport or enjoy some recreation themselves.
Whilst delivery of transport infrastructure in cities like Sydney or Melbourne is fantastic, and welcome - improved inter city trans and road infrastructure means the major satellite cities (again, like Newcastle or Geelong) offer real lifestyle benefits - more affordable, get ho me and take the kids to sport, or enjoy your own leisure and recreation time. There is no doubt that property buyers are Increasingly making that choice.
‘Close to home’ lifestyle assets
As property buyers make clear choices regarding location and travel, they look to local lifestyle assets, such as open space, parks, high quality public spaces, and of course retail therapy and 'eat streets'. The option to travel to locations like harbourside areas of Sydney, or inner city Melbourne for a high quality public domain experience is not longer enough. Buyers are looking for what's on the doorstep - quality outdoor recreation, well constructed an maintained public domain, vibrant dining and entertainment options. The transformation of public domain and the vibrant dining and entertainment scenes in the major regional centres means buyers have choice - and they are increasingly choosing the more liveable and affordable locations because the lifestyle is available.
Maintaining and renovating an existing older dewlling
Gen X first time buyers were far more likely to seek (and find!) an older home in an outer suburb as an entry level property. A 'doer-upper', where they felt they could build some sweat equity - fix the yards, paint, refurbish, renovate. That option is much less available - or desired - by millennial or younger buyers, for 2 main reasons.
One is that the price of the outer suburban 'renovator special' is often out of reach, and - post pandemic - the cost of renovating anything is much higher, trades are harder to find, and budgets are difficult to lock in.
The other and more influential reason is that buyers are actively choosing a well located apartment over the 'renovator special' free standing home. We are now seeing multiple buyer types - first time buyers, upgraders, and downsizers choosing well located apartments over many other alternatives. Younger buyers want their weekends, and value time to themselves or with friends over the burden (and cost) of maintaining an older home. Upgraders are often seeking more / better living space closer to work or schools or enjoyable amenity - and downsizers want the 'lock n leave' amenity of a nice apartment, and definitely don't want to maintain anything.
