In the last few years, the revitalisation of cities has been a fascinating story. It’s usually framed as cities thriving while suburbs founder. A concurrent idea is that the Millennial Generation is a truly “urban” generation and will not flee to the suburbs at a certain stage of life, as previous generations have done.
That would further boost the growth of cities compared to suburbs. Many commentators have taken issue with these characterisations, however, and new data backs them up. Is there truly a major shift taking place in housing preferences? What do Australians want in a home?
Though the world as a whole is urbanising rapidly, suburbs overall are not fading out. Australia’s hottest suburbs, in fact are growing faster than the cities, thanks at least partly to greater affordability in the suburbs.
Data from the Australian Bureau of Statistics show the appeal of the suburbs. Melbourne’s Cranbourne East claimed the country’s largest growth for 2014-2015, with nearly 4,600 new residents. South Morang jumped by about 4,200 new residents.
Melbourne has added 830,000 in population in the last decade, and may see that total reach 7 million by 2030. According to A Plan for Growing Sydney, 1.6 million more people will call the city home by 2031.
Though Australia has been in the thick of a construction boom, housing supply for detached housing has not kept up with demand, and prices have become disturbingly unaffordable in the capital cities, which helps to explain the growth in the more-affordable suburbs.
The International Demographia International Housing Affordability Survey ranked 86 cities around the world and declared that “Sydney and Melbourne are right at the top of the most unaffordable locations in the world.” Specifically, Sydney ranked as the second-least affordable city of the 86 surveyed, while Melbourne ranked fourth.
Aspiring homeowners in the lower-income strata must look elsewhere, and the suburbs offer what they need, if not precisely what many want. Domain Group chief economist Andrew Wilson noted in an article on Domain.com that “These are Melbourne’s growth areas and they show first home buyers are happily heading to the fringe.”
The fringe, however, may not be able to provide the great Australian dream to everyone. As Eamon Waterford, head of advocacy at the Committee for Sydney, an urban affairs think tank, noted in The Guardian, “The idea of owning a free-standing home on a quarter-acre block. It’s just not feasible. The houses of the future will be about small homes, shared spaces, bigger lifestyles.”
That sounds like the supposed preferences of the Millennial Generation. We’ve been told the Millennials are different in that they truly prefer urban living. Indeed, that is partly true, as confirmed by numerous studies detailing their preferences. There’s also evidence to suggest that, like their parents, young people prefer bustling cities, but most can’t afford to stay when they want children and a family home.
Further clouding the picture is data that suggests the global economic meltdown may have restricted demand, as young people could not afford to make the changes they wanted to, including moving and buying a home.
According to data-focused site FiveThirtyEight, which analysed US data, Millennials are definitely slower in migrating to suburbs than past generations.
“In the mid-1990s, people ages 25 to 29 were twice as likely to move from the city to the suburbs as vice versa. Today, they’re only about a quarter more likely,” the site reads. “But even that slowdown appears to be mostly about people delaying their move to the suburbs, not forgoing it entirely. Today’s 30-to-44-year-olds are actually heading for the suburbs at a significantly faster rate than in the 1990s.”
In addition, the Millennials are waiting longer than previous generations to marry and start families. Perhaps the larger truth is a familiar story: young people with jobs and few encumbrances embrace city life with gusto. When they settle down and contemplate the practicalities of city life, they simply won’t be able to afford it, and transition to the suburbs.
The “new urban dream” is appealing to many people, but is becoming too expensive for most.