This is Wave One in a new housing mindset. And almost nobody sees it.
You know me, I love a good deal.
But I also love a deal that does good things. So If I can find something that delivers a great return, and does a lot of good in the process, then it’s winner, winner, chicken dinner.
And that’s why I love the work Ian Ugarte is doing right now with radical, compact housing solutions. They putting rooves over people’s heads, AND they’re creating amazing cashflow deals for investors.
Now when we talk about affordability, we generally think about the poor young millennials, who are either locked out of the market or spending too much on café breakfasts, depending on who you ask.
But this is what nobody gets. When we’re talking about the trend towards compact and affordable housing solutions, we’re not just talking about millennial first home-buyers.
This is a multi-generational, society-wide trend. And the demand for these solutions comes from some very surprising places. Let me give you five:
#1 – Mid-life Newbies
We think affordability is an issue for people in their twenties. But with people pushing back starting a family, or simply needing longer to save a deposit, the average age of first home buyers is rising.
Data from HomeStart Finance shows that between 2011 and 2015, the number of first-home buyers over 40-years-old increased by more than 50 per cent. And those aged 50 and over increased by more than 100 per cent.
By 2020, they expect the majority of first home buyers to be aged over 40.
So it’s not jus the young crying out for housing solutions. It’s everyone.
#2 – Seniors are doing it tough, too
A phony media war between millennials and boomers hides the fact that a lot of older people are struggling with housing costs as well.
Professor Peter Phibbs, a housing specialist at the University of Sydney, says renters on the Age Pension are “doing it tough” because they have no way of increasing their income to cover rising costs.
“Rents are going up faster than the pension. They’re paying the rent and utilities and whatever they have left over, they live on, and if they get an unexpected bill, they just eat less,” he says. “There’s no leeway.”
Fiona York, co-manager of the Housing for the Aged Action Group (HAAG), says research shows Age Pensioners in the private rental market spend about 70 percent of their pension payments on rent.
More and more, we need to be thinking about how to create affordable, dignified housing for the elderly.
#3 – Families want to stay together
Related to the above, an ageing population is creating more desire and need for parents to stay close to their children.
In a recent study of multi-generational households, researchers at UNSW found that the main driver was financial (probably adult kids staying at home longer) but after that it was “care arrangements.”
However, when they looked at the problems associated with multi-generational living, it wasn’t about the kids not helping with the dishes (only 14%). Overwhelmingly it was about ‘Privacy’ (59%).
There is going to be huge demand gowing forward for housing options that put parents and children in close contact, but which also give them the privacy and sense of independence that they need.
#4 – The Suburbs are Killing Us
A recent Committee of Sydney report found that people who live in sparse suburbs, where they are reliant on the car for all aspects of their life, have far worse health outcomes that others.
They showed that people who live in western Sydney are twice as likely to die from cardiovascular diseases like heart failure and stroke!
In response, the reports authors wanted to see more high density housing, compact city living, more walkable town centres, an expanded rail network, and a cycle-to-work program.
At the planning level, the isolated suburb full of quarter acre blocks is on the way out.
#5 – Immigration Gateways
Historically, immigrants have used “gateway” suburbs to establish a new life here in Australia. Researchers at the City Futures Research Centre in UNSW showed that suburbs like Auburn in Sydney and Springvale in Melbourne have provided new immigrants with decent services and an immediate community, and this helped new immigrants begin a productive life in their new home.
However, the researchers now argue that housing costs are taking away this vital service:
“Many migrants can no longer afford to live in these areas, except in overcrowded or otherwise unsatisfactory living conditions… Today, the choice new migrants face is whether to live in unsatisfactory conditions in these areas, or to move to more affordable areas with fewer facilities and support services.”
Imagine if new immigrants had decent affordable housing, near the support they needed.
The Tide has Turned
I could go on, but I think you get my point. The need for decent affordable housing isn’t just a bugbear for the young. This is something that affects everyone.
But where there’s a problem there’s also an opportunity.
So much of the housing policy mindset in Australia is stuck in our suburban past, but this is quickly changing. City planners are crying out for solutions. Pioneers like Ian Ugarte are making it happen.
The tide has turned and the game has changed. And like all trends, the early-adopters are the ones who make the serious money.
Are you going to be one of them?
Do you know anyone who’s crying out for decent, affordable housing?