Who can afford the Great Australian Dream?

Property prices are a common topic of conversation among younger generations and first-home buyers. As the cost of housing grows, planners, policy makers and developers are exploring ways to keep the Great Australian Dream attainable.

Cameron Leggatt, Frasers Property Australia’s Chief Executive Officer, says housing affordability is something that’s “debated from living rooms to boardrooms and at every level of government on a daily basis.”

“Because there are so many contributing factors, it’s become a wicked problem that’s not easy to resolve,” he says.

Cost of unusual times

While the quandary of housing affordability in Australia been simmering for years, the turn of the decade presented unique circumstances. No-one could have predicted the conditions of the early 2020s, a figurative pouring of petrol on a slow-burning fire.

Factors pushing the demand and supply of the property cycle to breaking point include a pandemic-led property boom, supply chain shortages and record wet weather, followed by a post-pandemic surge in population growth and migration.

Leggatt says supply has been a huge problem.

“Opening up new pockets of development takes time. There are acquisition, planning, regulatory approvals and construction timetables to navigate, and that assumes you have the people and resources needed to see you through each stage.

“We know from conversations that we’re having with various local councils around the country that they’re struggling with a backlog of approvals.”

Aussie homeowner tradition

From informal barbecues to more formal dinner parties, Australians love discussing the latest real estate trends and forecasts. In terms of demand, the country remains infatuated with the Great Australian Dream of home ownership.

“Australians are property obsessed,” says Leggatt. “If people aren’t in the market, they feel nervous and anxious about it. Talking about property is almost our national past-time.”

“At its core, the dream is about owning your piece of Australia. It’s knowing that you’ve got a sense of security, that you’ve made it. That you can provide for your family, that you’re on that ladder of opportunity that owning a home affords you.”

Australia’s infatuation with the quintessential family home kicked off in a past era of rapid suburban development and abundant land availability. More than 80 years later, market dynamics present homebuyers with a different picture.

While outer fringe developments and regional centres still offer quarter-acre blocks, the contemporary property market offers much more diversity. Today’s homebuyers are savvy enough to think outside the box when purchasing property.

Apartments and townhouses have grown in popularity, most notably across inner and middle ring suburbs. Benefits these options offer span housing opportunities at more affordable price points, with access to in-demand locations.

While these changes in perspective have been driven in part by land prices and availability, evolving demographics are also reshaping traditional notions of the Great Aussie Dream.

Personalising your property vision

Matthew Allen, Director of architectural firm Bates Smart, says the single-storey house on a big block with three or four bedrooms no longer fits the bill for everyone.

“Different household compositions – from single people and couples without kids, to multigenerational families and downsizers – want homes tailored to their specific needs, not this one-size-fits-all mentality,” he says.

“When you think about it, the idea of one standalone house on a quarter-acre block satisfying the needs of the whole society… It’s an absurd notion.”

According to PropTrack Senior Economist Angus Moore, as society dynamics evolve, the concept of a lifelong “golden property” is making room for a “ladder of options”.

He notes pragmatic property buyers are now looking at housing as a five-year plan, gradually progressing to larger or better-located properties as their means and needs evolve.

“For young Australians who are faced with inevitable affordability pressures, the idea of buying your castle as your first home is increasingly difficult,” says Moore.

“Being adaptable and buying more of a starter home, then working your way up to your dream home is generally more achievable.

“That might mean instead of looking to buy a house you can live in for the next ten years, an apartment that will see you through the next five years or so could be more easily within reach.”

New possibilities for home buyers

Diversity of property choice plus high-quality amenities opens up opportunities for home buyers, which Leggatt says is seen in the success of various Frasers Property communities across the country.

Ed.Square and Midtown MacPark in Sydney, Burwood Brickworks and Mambourin in Melbourne, Brookhaven in Brisbane’s southwest, and Frasers Landing in Mandurah, Western Australia are just a few of the standout examples.

“From the minute we look at a site, we’re assessing how we can add value to it,” says Leggatt. “We’re always looking at how we can get as much variety into the product typology as we can, to get as many first-home buyers into the community as possible.

“People are really craving beautiful, convenient and useable amenity, as well as great infrastructure, like shopping, schools and transport. When you get it right, that’s when people feel they can make those key trade-offs to get into their first home.”

He believes homebuyers are more willing to sacrifice a little in terms of land size or number of bedrooms or car parking, when they know they’re going to be able to step out of their front door and get to things quickly.

“They’ve got everything that they would like to do on the weekends right there.”

Whatever the cost of housing, the Great Australian Dream appears set to remain deeply ingrained in the national psyche. But the Great Australian Aspiration will look markedly different than in the past, as homebuyers adjust their vision.

A more diverse property landscape that offers various entry points and affordable options – all while reflecting the multifaceted nature of modern Australian society – will continue to emerge.

As Leggatt says: “The Great Australian Dream isn’t dead, it’s just different.”

 

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Originally published as ‘Who can afford the Great Australian Dream?’.