A big Australia is arriving, sooner than most think. Once the 2016 Census numbers are in, we will see our population sit at around 24 million. By 2030 the predicted population is 30 million, with industry research estimating another 2.7 million homes are needed to accommodate that sort of population. As well as continuing to provide the lifestyle benefits that we all enjoy. Markets currently experiencing oversupply will be short lived, and, unless new construction activity keeps pace with population growth, housing prices will continue to trend upwards.
Not only do we have a growing population we also have an ageing one. Baby Boomers are commencing their transition into retirement. Their peak spending years are now well behind them, as they focus on the preservation of cash for retirement. Generation X will continue to do their thing, but as an age group, they’ll remain largely unseen as Gen Y will become the dominant generation in society. They will be the largest group in the workforce and the biggest consumers as their spending peaks, via the demand of goods and services to accommodate their own needs and the needs of their now young growing families.
The property market is maturing, it’s always been in vogue, but now it’s become an obsession. Economic, cultural and demographic trends have influenced this, and it will continue to evolve to suit the needs of an aspirational and lifestyle conscious younger demographic.
Media hype focuses on first home buyers being priced out of the market. Some most definitely are and others of the same age are becoming property accumulators. According to the Domain Consumer Insight Study the average age of an Australian property investor is 34. The average Gen Y becomes a property investor at the age of 25. This is in stark contrast to 35 years of age for Gen X and Baby Boomers who didn’t become investors until they were 45. In addition, 16% of Gen Y’s own two or more properties, compared to 17% of Baby Boomers or Gen X. Interestingly, 75% of these combined investors earned less than $80k.
Australians from all walks of life are opting to invest in property in more affordable markets and live where they want to live. Rentvesting is emerging, especially for those that are lifestyle conscious, and at the forefront of building the largest asset base they can with the money they can afford.
The nuclear family consisting of a couple and their 2.5 children will undoubtedly remain. The new tribes on the scene will be the social singles, lifestyle renters, work from home mobs, multi-generational families and property accumulators. Social singles are expected to be the fastest growing tribe growing at 2% a year to 2030.
These tribes will become increasingly connected with technology. They’ll become the business leaders of tomorrow, their start-ups of today will be enterprises in the short years to come. More emphasis will be placed on lifestyle as this younger, emerging and hugely influential demographic will search for more meaning in what they do.
Rentvesting will become a way of life, and these new emerging household groups focused on lifestyle choices, will have a direct impact on how we all live, along with how property is built, bought and sold.
We have changing demographics and a quickly adapting society to thank for all of this. Therefore, if you plan on becoming a successful investor who maintains a lifestyle, then rentvesting, might just be for you. To live a life that you would love, whilst, growing an asset base with what you can afford, then your ultimate success will hinge on how keenly attune you are to a changing nation and property market. Opportunities will be plenty, especially for those flexible and opportunistic enough to capitalise on these new market lifestyle trends.