Property News, Insights & Education

    How and where will Australians be Living in Ten Years?

    • The urban fringe of Australia’s cities will continue to boom during the 2020s according to a leading demographer
    • He predicts that in the 2030s attention will shift to housing redevelopments in the “middle suburbs”
    • Home values are unlikely to fall, but higher-density developments and innovations like prefabricated homes may make housing more affordable by 2033.

    Making predictions about what life will be like in the future is not easy. 

     

    While it can be fun for the average person to daydream about flying cars or robots doing the housework, planning for future urban growth is a serious job for governments and policymakers.  

     

    And getting it wrong can be costly.

     

    For example, in the early 1990s bureaucrats decided to close down several schools in inner parts of Sydney, because they anticipated student numbers would continue to fall.

     

    25 years later, they were busy repurposing old school sites and trying to find suitable locations for large new primary and secondary schools.

     

    The planners of the early 1990s had failed to predict that more families with children would prefer to live in inner-city apartments, townhouses and small homes, rather than spend hours commuting from houses on large blocks on the city’s outskirts.  

     

    Population modelling has come a long way since then, but it’s still not an exact science.

     

    Simon Kuestenmacher_03JAN24

    Image Source: In QLD

     

    Enter the stats guy…

     

    One of Australia’s most high-profile futurists is Simon Kuestenmacher, the Co-Founder of Melbourne-based The Demographics Group. He’s a regular newspaper columnist and is sought after by industry and governments for his insights.

     

    Recently he put pen to paper for The New Daily to look at how and where Australians would be living in 2033.

     

    “As an urban geographer and demographer, I am always drawn to population data first,” the man who dubs himself “The Stats Guy” says.

    “Every major housing shift in the next 10 years involves the Millennials (born 1982 to 1999).”

    Co-Founder of The Demographics Group, Simon Kuestenmacher

    Kuestenmacher says the Millennials - the biggest generational cohort in Australia - have only just started having children “at scale” and this will continue for at least the next decade.

     

    “That means between 2023 and 2033 that whole generation will collectively leave behind their inner-city hipster apartments to move to the urban fringe with their young families (parents, plus 1.6 kids on average),” he says.

     

    “Population flows like water to wherever the relevant housing stock is available and affordable.”

     

    He says that while Millennial families are smaller than their parents’ generation, they still need large homes, often with a study or home office.

     

    First to the urban fringe, then back into town…

     

    Simon Kuestenmacher sees two distinct scenarios emerging…

     

    “In the next 10 years the market will partly do the same thing it has done in the past decade – shrink the size of the lot and squeeze in a bigger home.”This will largely happen on the urban fringe and in nearby regional towns.

     

    But then in the 2030s, he says the balance will shift back towards CBDs.

     

    “The middle suburbs are the boom region of the 2030s”, he says.

     

    “This increased stock from the middle suburbs is guaranteed by the fact that Baby Boomers (born 1946 to 1963) and older cohorts (born before 1946) are either downsizing (minority) or being forced out of their properties due to health issues (common) and death (very common).”

     

    “This newly available housing stock will be most attractive to Millennials who want to bring their families with older kids closer to the centre of town,” he says.

     

    NIMBY Councils who push back on state government targets for urban infill will “see funding withheld or even (be) put under administration,” he warns.

     

    As for Generation X (those born between 1964 and 1981), Simon Kuestenmacher predicts they’ll stay in their existing homes “as they are way too young to downsize and the high housing costs minimise the number of Gen X upsizers”.

     

    Are young people locked out of the housing market? Perhaps not

     

    Kuestenmacher says today’s teenagers have plenty of reasons to be optimistic as housing will be more affordable in 2033 than it is in 2023.

     

    “But,” he writes, “we won’t see any major price collapses. Instead, we will see forces combine to soften house prices.”

     

    This includes the housing stock currently occupied by Baby Boomers being added “at scale” to the market…stock which will often be demolished to make way for apartments and townhouse developments.

     

    “The coming 10 years will finally see real innovation in the property field,” according to Kuestenmacher.

     

    This will include more “Build-to-rent” developments, but it will also include things like prefabricated homes, which he says “will make up a sizable minority of new dwelling stock by 2033.”

     

    To the relief of buyers, Kuestenmacher predicts stamp duty will be “a thing of the past” by 2033, as governments seek to make housing more affordable. 

     

    Location, location, location..

     

    In terms of areas that are likely to benefit, the Stats Guy says regional towns within a two-hour commute of capital city CBDs “will do really well”.

     

    He’s bullish about south-east Queensland, but thinks some of the steam may come out of the mining-boom driven Perth market in the longer term, as “economic diversification slows due to a lack of necessity for change.”

     

    The urban fringe will continue to boom. 

     

    The Federal government predicts Australia’s population will be just under 30 million in 2033; that’s 3.6 million more people than today.

     

    Two thirds of that growth will come from migration.

     

    Due to that continuing high migration, Simon Kuestenmacher says the inner suburbs will also see plenty of growth.