McGrath’s recent report indicates that millennial homebuyers are having a major impact on the property market. They are leading the ditch-the-cities trend in the face the pandemic.
McGrath’s executive director and founder John McGrath said that millennials continue looking for new ways of adapting to changing markets.
McGrath explained to us that VESPA, a movement of virus-escapees seeking out provincial Australia (young families millennials), has attracted a lot of younger people.
Some people move out of capital cities to find more affordable housing. Others choose to live in regional areas. These places provide a way to escape the big-city traffic and offer a slower pace.
McGrath’s study revealed that Australians 25-44 years old are the second largest group to flee capital cities in the quarter.
This trend was especially prominent in Sydney and Melbourne where a net 4,520 millennials were lost over the quarter.
Victoria and NSW saw the largest net increases in millennials.
McGrath stated that millennials don’t have to be entitled or lazy and are hard-working and good savers.
He said that many people were forced to leave the workforce during the Global Financial Crisis and that they were often near the end of their careers when COVID-19 hit.
Despite the efforts of millennials to save money, affordability is still a significant problem due the rapid rate of house price rise.
While many millennials have started saving 20%, they will need to save for an average of 8.6 years.
Many millennials turn to their parents to help them adapt.
McGrath indicated that many millennials are following the rentvesting trend.
In the form of grants for first-home owners or concessions on stamp duties, millennial homebuyers also had the support of the state governments and territories.
These factors and the low interest rate environment have made it possible for first-time home buyers to get involved in the market.
According to the Australian Bureau of Statistics, the total amount of lending to owners-occupiers to buyers of first homes has increased from the average of 24% in March 2019, up to 30.4% in March 2021.
However, affordability constraints have led to this dropping to 27.7%.
“Home ownership is still an important goal for tech-savvy millennials,” Mr McGrath said.
“Whilst many face uphill battles during the pandemic, especially those still studying or just starting out in their careers, it will doubtlessly make them even more resilient,” Mr McGrath said.
This is the top spot for first homebuyers
Hashching also did a separate study in order to find out where first-time buyers are finding their way onto housing ladders, as they move from the most competitive markets.
Arun Maharaj, CEO at Hashching, stated Queensland has been a refuge to first-homebuyers.
Toowoomba is the place where 20% of all transactions between first-homebuyers took place.
Mr Maharaj said that Toowoomba and the surrounding areas have a high number of first-homebuyers. The city can boast of providing affordable housing, job opportunities and transportation to attract first home buyers.
These are also hotspots where first-home buyers can find great deals in each state.
- St. Aubym
New South Wales:
- Devon Meadows
- Roxburgh Park
- Port Lincoln
- Flagstaff Hill
- Ascot Park
- Lenah Valley
- North Hobart