Insight

29.03.17  Property Trends

 

The Forever Home: How House-Hopping Became The New Normal

It used to be the Australian dream...

A single quarter acre block you could move into while relatively young, start and grow your young family and then chase the grandchildren around the garden, once your own kids had grown up.

Well, that Australian dream is now defunct, particularly in Sydney’s Eastern suburbs. In its place is a variety of property dreams, many of which actually suit our lifestyle a whole lot more.

From forever home to compulsive house hoppers

In the same way, very few of us still believe in a job for life. The era of buying our first home and living happily-ever-after between its walls is well and truly behind us. People now have two, three, four or five family residences over a lifetime.

That’s partly due to necessity: property prices are high, especially in Sydney’s Eastern Suburbs. So getting a foot on the ladder can mean starting out with something and upgrading over time as you build equity.

Upgrading property also has an aspirational aspect to it. So these days people tend to grow into a home then grow out of it, and move on to the next one when finances and lifestyle allow.

But it’s not just having a bigger budget to spend that precipitates a move. There are also several key trigger points in the modern home buyer’s lifecycle. This often includes having kids (or having the kids leave home) or wanting to be closer to what matters most in your life, whether that’s work, schools, transport or family. And each of these can necessitate changes to the way we live or even where we want to live.

The facts about modern homeowners

According to the ABS, we are still very much a nation of homeowners: 67% per cent of Australian households either own or are purchasing their own home.

Home ownership rates fluctuate depending on many lifestyle and economic variables, such as housing affordability, income, and household composition. However, perhaps surprisingly, Australian home ownership rates have been reasonably constant over more than four decades.

67% per cent of Australian households either own or are purchasing their own home.

ABS research also shows that one of the major influences on homeownership rates is age. In other words, the older you are, the more likely you are to be a homeowner.

Planning to get ahead

That said, young people aren’t entirely locked out of home ownership, even if they’re finding it more difficult to get a foot on the ladder. We see many people buying their first property - a small one or two-bedroom unit - while they’re still single. If they can’t afford to do that on their own, increasingly they’re joining forces with a friend and flatmate, or a family member.

After meeting someone or getting married, that same person will often look to sell and pool their resources with their partner - although, sometimes you see people hold onto at least one of the flats as an investment property.

Starting a family becomes the next trigger point, which often sees a move to a semi, small terrace or townhouse - or at least a bigger flat. And, while location matters when you’re young and single - especially for lifestyle reasons - during this second or third move it becomes even more important. In fact, it’s either at this point, or at least before the kids start school, that school catchments are mission critical - another property buying trigger point.

Then, when the kids leave home, it becomes about lifestyle again.

Increasingly, today’s downsizers are looking for transport links, walkability, and proximity to things like cafes, restaurants, galleries and museums: a checklist more similar to a single person in their twenties than to Generation X. But to get there, they’ve usually had two, three or four homes. And being on the property ladder for so long helps fund a comfortable scale down.

How the new forever home makes more sense

House-hopping can too often mean losing significant cash in things like stamp duty and other moving costs. But taking a careful, measured approach to leveraging your equity and upgrading to a new property over time can be a great tactic to get in and get ahead in a highly competitive market.

That’s why savvy buyers are seeing this bigger picture, and trying to find the house that’s right for their lifestyle at each point, rather than seeking one property that can do it all at once.

It’s an approach that can work particularly well in Sydney’s Eastern Suburbs. We’re incredibly lucky to have a wide range of housing options and there’s something for everyone’s lifestyle choice - from small apartments and starter homes to amazing terrace houses and family homes all near the beaches, harbour, and parks.

So, while it used to be common to see properties held in the same family for generations, these days you often see the same house come up for sale within three to five years - particularly at the “starter” end of the market.

That means when a long-held property gets listed that, in itself, can be an effective selling point. “First time offered in 50 years” is definitely worth putting on the sale board out the front of the home.

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Eastern Suburbs Market Report

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