As millennials enter their late 30s and early 40s, a significant demographic shift is on the horizon. Unlike their parents, this generation is looking for larger living spaces for their expanding families, with a focus on bigger, multi-generational homes. This trend not only reflects the evolving needs of millennials but also points to a potential boost for the Australian property market in the years ahead.
According to Realmark's John Percudani, the market's current trajectory is directly influenced by the significant impact of the baby boomer generation.
“As they move through different stages of their lives, their influence is undeniable, particularly in the property and healthcare industries,” he says.
“The changing housing needs of baby boomers, from first homes to apartments, have significantly shaped the property market.”
Since many people are now living into their nineties, planning to handle the increasing demand for housing and healthcare is important.
“We are seeing a growing trend of people downsizing into villas or apartments and eventually transitioning to assisted care,” says John.
“Baby boomers are moving into luxurious apartments in Perth; however, as the wealth of their generation is passed down, the next generation is significantly influencing the property market with higher buyer expectations and increased property investment. Another noticeable trend is the rise of dual generational living, where homes are designed to accommodate multiple generations."
Multi-generational living involves adult children cohabiting with their parents, grandparents, and great-grandparents. In many cultures, it is a long-standing tradition. For example, in Italy, over 65 percent of individuals aged 18 to 34 live with their parents. In the Middle East and Africa, where family bonds are strong, it's common for young adults to live with their parents.
“The impact of COVID-19 on the global economy has also resulted in more families living together under one roof,” says Realmark co-founder Anita Percudani.
“Many young people who once might have left home in their early twenties are staying at home longer due to financial challenges.”
To cater for multiple generations, the housing preferences of the millennial generation mark a departure from how they grew up. Instead of kids' bedrooms with bunk beds, shared bathrooms, a rumpus room, and a front porch for entertaining, the millennial generation's dream home includes parent and teenage retreats, ensuites, guest quarters for elderly parents, a media room, a wine cellar, expansive outdoor living areas, a home office, and a kitchen with a cosy, café-like atmosphere.
“It’s home-based around a lifestyle that caters to every generation while providing privacy and spaces where the whole family can come together,” says Anita.
Not only are the homes changing but also their location, with the next decade likely to see approximately 5 million millennials leaving sought-after city centres for quieter suburban or coastal communities outside major urban areas. This phenomenon, known as ‘The Great Relocation’, has been largely driven by the impact of the pandemic.
It is traditionally associated with baby boomers and those approaching retirement, though recent data from CoreLogic reveals that since the mid-2000s, nearly 80 percent of individuals moving from cities to regional areas have been aged under 50. This shift presents a significant opportunity for property developers and investors to tap into the potential of these emerging communities.
The major cities in Australia are expected to experience significant growth over the next two decades. The recent immigration increase of half a million people, combined with a rise in the natural population, emphasises the ongoing need for urban development in Australia's key regional and cultural centres.
According to The City of Perth, the WA capital is the fastest-growing major city in Australia. It is home to just over two million people (77 per cent of the state's population) and is forecast to become the third-largest city in Australia after Sydney and Melbourne, growing to 2.9 million people by 2031 and 3.5 million people by 2050. This strong growth trend combined with the generational shift of wealth and property preferences will create a unique and dynamic WA property market in the decades ahead.
"With robust foundations and a clear growth trajectory, it presents a promising future over the next ten years with many opportunities for development and investment,” says John.
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