Gen Y to drive decade-long housing boom
GENERATION Y will drive a "decade-long boom" in demand for houses in and around Brisbane and Ipswich as they ditch renting in favour of the Great Australian Dream, a leading economic forecaster predicts.
Changes to the age profile of the population over the next 10 years are likely to produce a shift in the type of demand for housing as those aged 20 to 34 move on to the next stage in life, a new BIS Oxford Economics report released on Thursday reveals.
Report author Angie Zigomanis said the emerging trend would underpin demand for new housing on Brisbane's suburban fringe and established housing in the inner city region.
"If Generation Y follows the trend of the previous generation and eschews renting in favour larger dwellings as they enter the family-forming age of life, then this will support a decade-long boom in demand for new houses and land in the new housing estates on the outskirts of Australia's major cities and affordable major regional centres," Mr Zigomanis said.
"Pressure is also likely to be maintained on house prices in established areas, as competition remains strong for Generation Y families looking to remain in the established areas where they have already been living and renting in smaller apartments."
In Queensland, Mr Zigomanis said demand for new housing would occur in areas like Ipswich, Logan, Jimboomba and North Lakes, while demand for established housing would be concentrated within a 10km radius of the Brisbane CBD.
"The challenge is if you get a reluctance by some of those Gen Ys to move to housing in the outer suburbs, then it puts the onus on the government to try and accommodate that growth in demand in the middle ring and to be able to facilitate the construction of more suitable housing," he said.
The Emerging Trends in Residential Market Demand report, which examines trends revealed by analysis of Census data from the past 25 years, found there had been rapid population growth among 20 to 34-year olds in the past 15 years.
The report found that was driven by the movement of Generation Y into that age group and strong net overseas migration inflows.
Mr Zigomanis said that had helped to support the boom in apartment construction in the past decade by supplying a steady stream of new tenants to the market.
"However, over the next decade, this surge in 20 to 34-year olds will translate to an acceleration in household growth of those in their late 30s and early 40s," Mr Zigomanis said.
"By this stage, Generation Y will be increasingly coupling up and moving into the family-forming stage of life, and many will be looking to purchase a dwelling - most likely larger dwellings such as detached houses or townhouses, or family-friendly apartments."
That's the case for Richie Yates, 29, and Amy Argyros, 30, who have just bought their first house in Carina in Brisbane's middle ring.
The engaged couple had been renting for about five years and spent three of those saving a 20 per cent deposit for a house.
They plan to renovate the property and live there for the foreseeable future.
One of the reasons they liked the house was that it was in a quiet, cul-de-sac with a playground at the end of it.
"There's also a golf course going in across the road, so I think down the track that will have a positive affect on the area," Mr Yates said.
Steve Yates of Place New Farm said he regularly dealt with newly engaged or newly married Generation Y buyers looking to get a foot in the market in Brisbane's inner to middle ring suburbs.
"They're generally looking to get as close to the city as they can and where they land depends on their budget," Mr Yates said.
"My feeling on the ground is that supply generally is meeting demand.
"There's starting to be that generational switching over of ownership of properties, but it really depends on the location as to how tight the market is."