11 Nov Gen Y enters the family phase – Angie Zigomanis
Demographic changes over the next decade are going to drive a shift in demand for property as Gen Y enters the ‘family phase’. Angie Zigomanis from BIS Oxford Economics looks at the likely impact of that on the property market.
Kevin: Demographic changes over the next decade are going to drive a shift in demand as Gen Y, now aged between 20 and 35 years old, begin to transition into family phase. What does all that mean? Joining us to discuss that, Angie Zigomanis, who is the senior manager of residential property market research at BIS Oxford Economics. Angie, thanks for your time.
Angie: Yeah, no problem at all.
Kevin: Tell me what’s happening with Gen Y as they enter this family phase? What are we seeing, and what sort of impact is it going to have on the market, do you think?
Angie: Well, look, at the moment, the two really big sort of bulges in the population, the first are the baby boomers, and we’ve talked about them. The next one behind them is Gen Y. They’re really the children of the baby boomers, and a bit of overseas migration falls into that category as well. Most of them at the moment, the ones that aren’t living at home are living in rental dwellings. And they’re aged roughly 20 to 35.
Angie: The next decade if you follow previous generations they’ll start coupling up, having kids and entering into family like and if you also look at previous generations that is often a trigger to move from an apartment and from renting to a new house and owner occupation and so they’re looking for something that’s more spacious.
Kevin: So I understand too the research is showing us that more than a half of Gen Ys were renters in 2016 which is up a little bit from 43%.
Angie: Yes. And that’s just a function I guess of housing markets being a bit more difficult for ownership but I suspect there’s probably an element that do prefer to rent where they’d be preferring to lease for a longer period.
Kevin: What about Gen Ys in terms of incomes and savings, Angie?
Angie: Incomes are, I suspect they probably wouldn’t be that different from previous generations in relative terms. But I’d suspect you’d find the fact that there are more are living in rentals suggests that their savings perhaps aren’t sufficient now to achieve a deposit compared to previous generations.
Kevin: And what about houses and townhouses or units? Are they showing a preference for anything in those areas?
Angie: Well increasingly it’s towards high-density dwellings so it’s townhouses and units. In the good old days, I guess, people used to have kids and move out to a new housing estate and a new house out in the burbs. Whereas now many of them have gotten used to living life closer to work and closer to higher amenity areas. And now, when looking for something, when looking for a dwelling to buy they I guess need to make a trade off between location, being closer to that work amenity, but also between price and size because at the end of the day most of the inner and middle suburbs of the big cities are fairly expensive and out of the reach for people on the Gen Y income.
Kevin: Is that more acute in areas like Sidney where we’re getting the need for lots more density as opposed to say like Brisbane or Adelaide and Perth.
Angie: Yeah definitely. It’s most pronounced in Sydney and it’s evident in all the sort of high density dwellings that you’re seeing built in Sydney and affordability is a function of it. If you look at the order of the cities it’s the most pronounced in Sydney followed by Melbourne, Brisbane and then Perth and Adelaide.
Kevin: Angie in fact has written a really interesting article that’s in the latest Your Investment Property magazine. Which is out right now.
Kevin: My guest has been Angie Zigomanis from BIS Oxford Economics. Make sure you pick up YIP Magazine and read the article. Angie, thanks very much for your time.
Angie: No problem at all Kevin.