Changing housing affordability within a suburb or city often comes with an inevitable shift in demographics as residents find their way to more affordable locations and those who are wealthy, move into the premium locations. We are starting to see this shift happened more often as Sydney’s housing prices grow over the last decade.
While ten years ago, we had seen many people aged between 25 and 34 live within the inner city, young professionals who prefer convenience and the lifestyle to match. These days, we have a generation who is more receptive to the higher rents demanded by the inner city and are heading west to take advantage of the affordability.
This article on Domain highlights in perfectly, with council areas Strathfield, Cumberland, Burwood, Parramatta and Ryde all within the top 10 growth areas for this age group. We have also seen a decline in the Inner West while areas such as Parramatta have increased at much the same rate of 20.2 per cent over 10 years.
A factor that has played into this is the fact that for many young people, home ownership is no longer a goal. Instead they prefer to rent their accommodation for the affordability while living in locations that they choose. This doesn’t mean property is off the radar completely, many young people have a lot in savings which are better spent investing for their future in property outside of the areas they live in.
The decision to invest rather than by a home is one which Gen Y resonate with, with 78% per cent of the group identified in a survey by Galaxy Research finding it a good option. Comparing this with the 66 per cent of the traditionalist generation, we can see that there is a growing focus on lifestyle and less of the traditional concept of home ownership.
Another factor is the changing demographic of household size. In the past, those in this age group were concerned with settling down and starting a family. Today however, many in this group are still single and have a higher focus on lifestyle, affordability and convenience meaning they enter the market much later and with investment in mind rather than having a place to call their own.
The locations these savvy rentvestors decide on are quite different from where an owner occupier would settle down in. Many of the factors are centered around the performance of the property as an investment rather than what makes the best place to raise a family, commute to work or friendly neighbours.
Instead it is all about affordability, growth and yield, these rentvesters want to ensure that their hard earned savings will continue to grow. This means investment can take place in locations regardless of where they are renting with many choosing to invest outside their home cities and even interstate, focusing on which markets are poised for growth while remaining affordable, which can be difficult in cities like Sydney and Melbourne.