Will households in Australia get even smaller?

For those that have been to a Nyko Information Evening in the past or regularly read our blogs you would know that we are (for want of a better term) property agnostic. That is, we do not prefer one property type over another i.e houses, town house, apartments.

It is very much horses for courses, meaning the demographic in the area dictates the property type we recommend. If the location has mostly families with 2 children then we would likely recommend a house or larger town house, using the same theory if there are mostly elderly residents in a suburb then we won’t be recommending a 3-story town house with 6 flights of stairs!

When it comes to Australia as a whole, households are getting smaller. There are only 2.6 residents per household in Australia and while that low number may be a surprise to some, it is actually higher than many of our counterparts in developed western nations. England, Scotland, New Zealand and Japan all have smaller households and we are certainly trending towards those smaller households ourselves.

Interestingly only 45% of households in Australia compose of a couple with children, the remaining 55% include couples with no children, single parent households or single people. Theoretically, all of these people could comfortably live in a smaller dwelling like an apartment or town house.

Does that mean that we should all rush out and buy apartments? Well not necessarily, when Nyko performs our macro research and selects the locations we believe are most likely to perform, they may well consist of a dominant demographic group that would prefer houses or town houses. A case in point is Nyko’s current recommended projects, where all but one of the developments are town house or house and land locations, with the solitary boutique apartment project.

Over the years at Nyko we have seen apartments perform fantastically well in very selective projects and the theory that ‘apartments don’t grow’ is simply not true. When people speak negatively of apartments, what they often mean are ‘high rise apartments’ and the negative connotations that go with those. Boutique apartment blocks with owner occupier grade finishes will certainly continue to appeal to a large proportion of the population.

So the moral of the story is don’t concentrate on the type of property but rather the location that is likely to perform and then select the property type which best suits the demographic in that area.

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