Prospective home buyers are beginning to value location and security more than having a big garden or floor space, according to a new research report produced by think tank the Grattan Institute.
The news comes as the auctions market has continued to struggle a few weeks into the spring selling season, with clearance rates roughly in line with their performance over the past few months.
The Grattan Institute “What Matters Most” survey found that the number of bedrooms in a home ranks as the highest concern across all demographics, followed by safety for occupants, proximity to family and friends and the number of living spaces in the home.
Researcher and report co-author Ben Weidmann says the traditional idea that families want a large, detached house with a backyard isn’t necessarily true, and that shifts in the population are leading to changes in the reasons people want certain houses.
“One interesting thing we found is around the idea of location. There tends to be this idea that people will continue to drive further out until they get that detached house with a yard, but that isn’t the case. There is a mix of preferences here and they differ across the population,” he says.
“Particularly, they change by age and household type.”
The report found that older households tend to be focused on those location-type variables, such as being close to family and friends, while safety and security also becomes a priority as people live by themselves. Proximity to health services is also a factor.
Weidmann says the idea of having a larger house with a large number of bedrooms is now important to younger families.
“That was the only demographic that actually prioritised having a garden, whereas the other groups didn’t put that first,” he says. “We’re finding that lot sizes are getting smaller but housing sizes are actually getting bigger.”
Weidmann says as the population ages and more people wait to have children, the property industry will need to adapt. But he also says the construction industry needs to be dynamic, and shift to the needs of different areas – not just assume that one size house will fit all.
“It’s definitely a case of priorities of different segments of the population seem to want different things. You might expect this to shift as the population changes and the overall kind of housing changes as well.”
Meanwhile, auction results have continued to remain flat into the spring selling season, despite the first sign of warmer weather in Melbourne over the weekend.
According to the Real Estate Institute of Victoria, the city only recorded a clearance rate of 57%. Chief executive Enzo Raimondo noted that only 11,500 homes have been sold at auction this year, less than 2010, 2008 and 2007, but more than 2009 and 2006.
Sydney recorded a clearance rate of 57%, followed by Adelaide and Brisbane with 23.8% and 42.1% respectively.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
