Nearly half of people believe that “the Australian dream of property is still a reality”, but the idea of the “dream home” is being redefined as people wish to live closer to cities.
More than one million responses were submitted to a range of questions asked at Commonwealth Bank cash machines in May, the responses to which were collated by the founder of strategy agency Hello Clarity, Claire Madden, for the bank’s Connected Future Report.
According to the research, of those asked whether the “Australian dream of property [is] still a reality”, less than half (48 per cent) said that it was.
The levels of optimism differed across the country, with the highest sentiment being in the Northern Territory (57 per cent), and the lowest being in NSW and Vic (53 and 54 per cent, respectively).
Speaking to Mortgage Business, Ms Madden said that this may be due to the fact that the NT has high wages and low unemployment levels
The report also found that the number of first home buyers buying a house is now just under three-quarters (74 per cent) for those living in cities, while 81 per cent outside of the capitals reside in detached houses.
Further, the CBA data shows that 68 per cent of buyers bought a home, with 15 per cent buying an apartment or townhouse and 16 per cent buying land on which to buy a home.
Ms Madden said: “The idea of the home they are buying to fulfil that Australian dream has changed. So, with the Baby Boomers and their picture of the Australian dream it was that quarter acre block, a standalone house with enough room in the backyard to have a makeshift cricket pitch. Whereas it's being redefined now.
“The younger generations are still entering the property market, however it's looking quite differently than it did for previous generations in terms of what they are buying. It's smaller block sizes, there's an increase in medium and high-density housing (48 per cent of all residential approvals in the last year across the nation have been for medium and high-density housing and obviously that is even higher in the major cities), so in that respect, what they are getting as they enter the market is looking quite different.
“I think that's why we have some people saying yes it's still a reality and others saying by their actions that they are clearly still getting into the property market but with a redefined dream for the new generations.”
Notably, the report found that the average age of a first home buyer is 32 years – and that those aged between 25 and 34 made up the highest proportion of first home buyers (57 per cent). Despite this, these age brackets reported the lowest levels of confidence that buying a property was a reality.
Ms Madden argued that the lowest level of optimism (41.5 per cent) was in the age bracket of 25-29 because “the challenge of home ownership [if the average age of FHBs is 32] is still ahead of them”.
She said: “There's probably a number of factors feeding into that, or leading to that figure. One is the reality that the challenge is still ahead of them, whereas the older generations who are more optimistic have actually achieved the Australian dream already. They have paid off their homes and they are enjoying the experience of that.”
Ms Madden added that younger generations also faced higher unemployment levels (more than double that of the national average, as at April 2017), which could be a further reason for the lack of optimism.
She added: “What we can see is that it is still a desire for these younger generations, despite the fact that the rhetoric that is widely spoken is that it is all too hard for these younger generations, they are resilient and determined and committed to finding a way to own property.
“So, if mortgage brokers can help facilitate that for the emerging generations and help find solutions to overcome the obstacles and to respond to the new realities… they can help these young people get that first foot in the market, which they want to do.”