Do Gen Z Even Care to Buy a Home Anymore?
Is it All Just Real Estate Dystopia?
In the evolving landscape of Australian real estate, a key question emerges: Does Generation Z (born between 1997 and 2012) prioritise home ownership, or have shifting economic and societal factors reshaped their aspirations?
Understanding Gen Z’s stance on property ownership is crucial, as their preferences will significantly influence the future trajectory of the housing market. So, what’s going on for Zers?
Gen Z’s Aspirations and Challenges
Despite facing formidable economic challenges, surprisingly, home ownership remains a top aspiration for many in Gen Z.
A study by McCrindle Research reveals that 63% of Gen Z individuals cite owning a home as their primary life goal, surpassing desires for financial freedom and global travel. It appears the majority of Zers still hold onto the great Aussie dream of home ownership.
However, the path to home ownership is fraught with obstacles for this generation. Affordability issues, escalating property prices, and stringent lending criteria pose significant barriers.
A report from Afterpay highlights that Gen Z Australians are half as likely to own a home compared to Baby Boomers at the same age, underscoring the growing challenges faced by younger generations in entering the property market. If Gen Z want to enter the homeownership game, they are needing to think outside the proverbial square.
Innovative Housing Solutions
In response to these challenges, innovative housing models are gaining traction among Gen Z. Co-living arrangements and build-to-rent developments offer flexibility and affordability, aligning with the lifestyle preferences of younger Australians. These models provide communal living spaces with shared amenities, reducing individual financial burdens and fostering a sense of community.
Co-ownership with family, friends and co-workers is an alternative solution Gen Z are turning to so as to enter the housing market with financial strength.
Market Forecast and Potential Decline
The Australian property market has exhibited remarkable resilience since the COVID-19 pandemic, but signs suggest a potential slowdown is underway.
December 2024 marked the first national price decline in nearly two years, with a 0.1% drop attributed to high mortgage rates and increased property listings.
Analysts forecast modest national price growth between 1% to 6% in 2025, with significant regional variations. Sydney and Melbourne may experience price declines due to rising supply and affordability constraints, while markets like Brisbane and Perth could see continued growth.
Implications for Gen Z
A potential market slowdown presents a double-edged sword for Gen Z.
On one hand, decelerating price growth could improve affordability, offering a window of opportunity for prospective young buyers. On the other hand, economic uncertainties and potential interest rate fluctuations may exacerbate financial challenges, necessitating cautious navigation of the market.
What’s a Zer To Do?
While home ownership remains a coveted goal for Generation Z Australians, economic realities and evolving societal norms are reshaping traditional pathways to property acquisition.
Innovative housing solutions and a potential market slowdown may offer alternative avenues, but significant challenges persist.
As Gen Z continues to adapt to these dynamics, their collective decisions will play a pivotal role in shaping the future contours of Australia’s property landscape.
If you’re a Gen Zer considering buying your first property we’ve got your back. We’ll assist you to buy smart – whilst making the process streamlined and stress free for you. Contact us at support@kittyandmiles.com.au or by telephone at (02) 8916 6172 and breathe easy!
