Millennials are usually kept out of the property market when prices rise because it means they would need a bigger deposit.
Since the pandemic has made remote working more common, many Millennials have found they no longer need to reside near Central Business Districts (CBDs) and can buy homes near city fringes and outer suburbs.
As a result, they are buying spacious properties anywhere from right on the edges of cities to 130-140 kilometres from CBD – and paying less.
Aptly called The Goldilocks Zone, the properties in these areas are neither too far from the CBD to allow a manageable commute nor too close to have affordable prices.
Some areas in The Goldilocks Zone include:
- Bowral (south of Sydney)
- The NSW North Coast, including Newcastle and Wyong
- Orange (Central NSW)
- Daylesford (northwest of Melbourne)
- Maleny (Queensland’s Sunshine Coast)
- Nerang (Queensland’s Gold Coast)
- Geelong (south of Melbourne)
Why are Millennials choosing these areas?
- Most are working remotely, so they don’t need to live near the CBD, where offices are located.
- Buying property near a CBD is too expensive. They can afford to buy in the Goldilocks area with a smaller deposit.
- The CBD is too congested; they are looking for less-populated areas.
- They want a home with dedicated office space.
- They prefer locations that are closer to coastline or beaches.
Millennials are changing the housing market landscape
The seachange and tree change movements were popular with Australians over age 55 who wanted to downsize; however, people between the ages of 25 and 44 are now shifting farther from CBDs, too.
Even Millennials who are renting can now afford properties in The Goldilocks Zone, as interest rates are at record lows.
To meet the growing call for dedicated home offices, property developers could design homes to address their demand.
‘Rentvesting‘ is becoming a popular investment strategy among young buyers. They’re living in regional areas while renting out apartments in cities.
A decentralisation of the CBD might occur if most Millennials decide to live near city fringes. This would have a ripple effect, as the outer suburbs would develop to meet the growing demand.
Buying your first home?
Millennials in Australia have a great chance of buying their first home soon.
If you’re looking to start your home buying journey, our mortgage brokers are here to help. Call us on 1300 889 743 or fill in our free no-obligation assessment form.