The rise of multigenerational living and its impact on Sydney’s property markets
Multigenerational households, where more than one generation of adults cohabitate, have increasingly become the norm in urban settings worldwide, and Sydney is no exception, with research showing that over four million Australians live in a multigenerational home. 1
Here, we look at what is driving this growing trend and the implications for Sydney’s property market, which are profound and worth considering for anyone involved in property buying or selling in the city.
Factors driving the trend
Cultural Tradition Multigenerational living has deep cultural roots, especially in Asian, Middle Eastern, and Southern European communities. In places like Sydney, celebrated for its rich multicultural tapestry, many immigrants find solace and familiarity in preserving their traditions, including living arrangements that span generations. While these households reflect a cherished cultural continuity, the broader adoption of multigenerational living in Sydney and other cosmopolitan cities is also influenced by a myriad of modern factors beyond just tradition.
Economic Challenges and Housing Choices Recent decades have seen a worldwide trend of surging housing prices, particularly in global cities like Sydney. This made homeownership increasingly challenging. Based on data from the most recent census, the Australian Bureau of Statistics (ABS) compared homeownership rates among those aged 25-39. They found that in 2021, only 54.6% of Millennials were homeowners, which represents a steep decline from comparable data for Generation X (62.1% were homeowners in 2006) and for Baby Boomers in (65.8% owned homes in 1991). 2
Notably, Baby Boomers were three times more likely to own their homes outright during their time compared to Millennials today.
Kippers (kids in parents’ pockets eroding retirement savings) The “kippers” trend speaks volumes. With the ever-climbing cost of living and the unpredictable job market, it’s no surprise that many young adults are choosing the comfort of their family homes for a bit longer. This isn’t just about financial comfort. Over recent decades, there’s been a clear trend of young adults, especially those between 20-34, staying at home. From 1986 to 2006, this group grew from 19% to 23%. 3
Another contributing factor? Modern societal shifts see individuals delaying significant life events such as marriage or starting families. Additionally, there’s a notable phenomenon with young adults who, after initially venturing out, find their way back to the familial nest. Surprisingly, nearly half of this group revisits their family homes by the age of 35.
Environmental advantages of multigenerational living
Interestingly, while most multigenerational family households form primarily due to financial pressures, caregiving needs, or family disruptions like divorce or unemployment, they inadvertently promote sustainability.
Research indicates that these households don’t typically emerge out of an intent to be environmentally conscious 4. However, the environmental benefits they offer can’t be ignored. Studies have shown that household size is inversely related to per capita resource consumption and waste generation.5
By consolidating more family members under one roof, multigenerational living can lead to significant reductions in energy use, water consumption, and the need for building materials and land.
Impact on property market
As multigenerational living becomes more prevalent, its ripple effects on Sydney’s property market are evident in four key areas:
1.Demand for larger homes Multigenerational families often seek spacious residences, driving demand for properties with expansive kitchens, multiple living areas, and extra bathrooms. 2. Rise in granny and secondary dwellings Such additions are becoming pivotal selling points. They offer the advantage of proximity while preserving individual privacy, meeting the needs of multigenerational families. 3. Neighbourhood preferences Localities with a diverse property mix, from apartments to large family homes, are in high demand. Such areas cater to a broad demographic spectrum, appealing to both young professionals and older generations. 4. Property Valuation As demand trends shift, properties adaptable to multigenerational living might see a valuation boost, potentially offering sellers a competitive edge.
Summing up
Multigenerational living reflects the socio-economic and cultural shifts happening in Sydney and other major cities. Recognizing the growing demand for homes tailored for extended families is vital for potential property buyers and sellers. As the market adjusts to these needs, opportunities will arise for property owners with homes suitable for these family structures.
For those navigating Sydney’s real estate landscape - whether buying, selling, or investing - understanding these trends can offer an advantage, and DiJones is here to guide and assist through these evolving dynamics, ensuring you are well-positioned in Sydney’s dynamic property market.
[1] Liu, E., & Easthope, H. (Eds.) (2016). Multigenerational Family Living: Evidence and Policy Implications from Australia. Routledge [2] https://www.abs.gov.au/articles/back-my-day-comparing-millennials-earlier-generations [3] Pink, B. (2009). Australian Social Trends, June2009, Cat. No.4102.0, Australian Bureau of Statistics, Canberra [4] Klocker, N, Gibson, C and Borger, E. (2012). ‘Living together, but apart: Material geographies of everyday sustainability in extended family households’, Environment and Planning A, vol.44, no.9, pp.2240–2259 [5] Liu, J, Daily, G, Ehrlich, P and Luck, G. (2003). ‘Effects of household dynamics on resource consumption and biodiversity’, Nature, vol.421, pp.530–533
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