While there will always be divergence between what individual buyers look for in a home, broader population shifts will carry real world implications for real estate.
The Australian market is currently witnessing a seismic shift, as its younger demographics spark a changing of the guard and Millennials – born between 1981 and 1996 – become first home buyers.
The average first homebuyer age is around 35, according to the Australian Bureau of Statistics, with a record number of Australians currently between 30 and 40 years of age.1
“Millennials are now the largest adult cohort in Australia and a lot of them are first homebuyers. Their preferences are going to really be reflected in the housing market over the next decade,” says CoreLogic Head of Australian Research Eliza Owen.
This could produce even more demand for established housing — property that has been owned previously for six months or more — with 80% of first homebuyers already favouring it over new construction. In capital cities, there could be a flow-on effect for the most in-demand suburbs.
“In different cities, these buyers might be drawn to certain areas. In cities like Sydney, that cohort could push into areas like the Central Coast for the lifestyle or to the city’s southwest because it’s a natural extension of the inner west,” says Owen.
While starting later than previous generation, Millennials starting families could reach a tipping point over the next decade, leading to a delayed but significant turnover of family homes.
“There is a reluctance among older Australians to downsize which may be contributing to a shortage of family housing. In 2011 in New South Wales, 23.9% of two-person family households were in dwellings with four or more bedrooms. That shot up to 28.9% in the 2021 census,” says Owen.
This trend could begin to reverse as Baby Boomers continue to move out of the workforce and pent-up demand builds for larger detached homes.