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New property trends: multi-gen living

John McGrath
4 July 2016

By John McGrath

One of the best things about Australian property buyers and renters is their ability to adapt to changing market conditions.

As we all know, one of the greatest challenges today is the ability to afford a place to live, and more specifically, a place to live in the area you actually want to reside in.

Over the past five years alone, we’ve seen some significant new trends in the marketplace that have come about purely due to Australians’ ingenuity in dealing with this challenge.

Among those trends are:

  1. First home buyers purchasing for investment in affordable areas to get a foot in the market and renting in their preferred area for lifestyle
  2. Parents going guarantor on a loan, or providing the deposit for their child’s first home
  3. Siblings or friends pooling funds to get out of the rental cycle and purchase a property they can live in together
  4. Young families leaving expensive cities like Sydney in favour of a better lifestyle and greater affordability of housing in major regional markets and;
  5. Families choosing apartment living over houses so they can afford to buy where they want to live

Another rising new trend to combat affordability is extended families living together – or multi-generational living. By extended families, I’m talking typically about mum, dad and their kids, plus grandparents.

The rise of multi-gen households

Research undertaken by UNSW’s City Futures Research Centre shows multi-gen living in Australia has been steadily increasing since the 1980s.

In 2006, around 1 in 5 Australians (and 1 in 4 in Sydney) lived in a household with two or more generations of related adults aged over 18.

You might not be surprised to find this is a trend in Sydney, where property prices are more expensive than anywhere else in the country. But the city that has experienced the greatest growth in multi-gen living is actually the far more affordable Brisbane, where the number of multi-gen homes increased by 51.7% between 1981-2006 compared to 36.1% in Sydney.

This demonstrates that there are other reasons for the rise in multi-gen living. Aside from financial pressure, the next most common reasons are the need or desire to provide care to a family member, usually a grandparent – a trend we should expect to see rising due to our ageing population, and children staying at home longer because they are delaying marriage and want to avoid paying rent so they can save more for their first home.

Multi-gen living is also a trend in the US, where 57 million Americans, or 18% of the population, lives in households with two or more generations. In 1980, it was 28 million. The trend spiked during the GFC and has continued rising, according to the Pew Research Centre.

The benefits of multi-gen living

Besides housing affordability, there’s a few other benefits to multi-gen living that people talk about too;

  1. Free childcare from the grandparents, with both mum and dad typically working to pay the mortgage
  2. Greater sharing of household chores, reducing the amount of housework done by each family member
  3. Security for the grandparents that someone will be there to look after them as they age and battle health issues

There’s another reason we’re seeing more multi-gen households in Australia – rising immigration, particularly from Asia.

In Asia, multi-gen living is normal. So when they come to Australia, it’s a culture they bring with them. As more Asian families move here, more multi-gen households will form.

The type of housing that multi-gen families target certainly varies depending on their budget, but also their relationships. For some families, separation and the ability to live independently of each other, while still being in the same property, is a priority.

In these cases, duplexes with separate self-contained levels or large homes that allow for some sort of division of space are sought-after. Properties on large blocks of land that allow for the construction of a granny flat out the back are also attractive to multi-gen buyers.

Multi-gens also do their fair share of knock-down/re-builds and major extensions of existing homes to accommodate their new living arrangements.

Most multi-gen households can be found in our cities’ middle and outer rings, most likely reflective of financial pressures among lower to middle income families and greater availability of larger homes with four or five bedrooms in these areas.

If you’re thinking of multi-gen living with some of your family members, my advice is be honest with yourself about how you want to live before proposing the idea to your relatives.

Consider where you want to live, how much space or separation you would need for yourself and how costs such as the mortgage, electricity, water and groceries would be split.

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