Let’s talk age.
Where are generations living? Why is important to note? And how does it affect property investors?
Australia’s demographics are changing and for keen property investors understanding the link between who is renting and where they are renting is particularly influential when it comes to decisions surrounding the purchase of property.
Not everyone goes through the rental cycle in the same way… in that not everyone will become a home-owner. It has been noted the difficulty in getting ‘into’ the market and low vacancy rates across the country indicate there is still strong need for rentals.
All generations rent, therefore it is important for property investors to be familiar with understanding the needs and position of each generation.
When we consider the needs of each generation, what they may require in a property and where they choose to live may be considerably different. For example, a semi-retired couple may not wish to reside in a high-density suburb close to a University, this location may be better suited to students. Young families may look to more family-friendly suburbs, where parks and community events are ripe.
The needs of Generation Z (born 1995-2009) are vastly different to the needs of Baby Boomers, and as both move into different stages of life their needs will change. Of course, there are exceptions. Not all Baby Boomers are ready to retire just yet, just as not all Generation Y will choose to have a family. But the collective generations do shape the property market and will be most prominent in the design and development of new suburbs.
The age structure of our population is fluid. Baby boomers (born 1946-65) are beginning to reach retirement age and are set to be overtaken by Millennials (born 1981-1995) as Australia’s largest generation.
It’s predicted over the coming years we’ll see a shift in demographics of some suburbs as empty nesters may choose to downsize, opening opportunities for young families who may wish to obtain larger properties.
For property investors seeking to grow and expand, understanding the needs of future tenants and where they may be looking to enjoy their lifestyles will be an excellent tool in strengthening their portfolio.