August 22, 2018 by Dymphna

Critical Data To Renovate for More Profit

Turns out there are some ‘generational differences’ in the ideal home. Good to know.

I found this study in one of my reading tours and I thought it was really interesting.

Basically, they asked some people what home features they’d be willing to give up to live in their preferred neighbourhood.

They then broke the results down into baby-boomers, Generation X’ers, and Millennials.

There are some really interesting differences. The study is from America, but I reckon the data would be similar very similar here.

And what it shows is that housing tastes are always changing. That creates a market need for people to rework or repurpose the existing housing stock.

And where there’s a market need, there’s an ability to make money servicing that need.

Anyway, take a look at the results:

There’s a bit to it, but to start, jump down to the last line. That’s one of the biggest differences.

It says that only 15% of millennials would not be willing to give up anything to live in their ideal neighbourhood. 85% reckon they’d make at least some sacrifices to live where they want.

Baby-boomers are considerably fussier. 35% couldn’t be enticed into any sort of downgrade to live in a better location.

That taps into a bit of a stylisation – that younger people are more focused on where they live rather than what they live in.

However, a substantial 65% of baby-boomers would still be willing to make some sacrifices, which just goes to show that property is still predominantly about location, location, location.

Another key difference that jumps out at me is the garage. Only 15% of baby-boomers would be willing to let the garage go, whereas 35% of millennials would.

I suspect this might have something to do with where the ideal locations for millennials might be. I mean, if we were talking the popular inner-city suburbs of Sydney, Brisbane or Melbourne, almost no one has a garage anyway.

Still, it points to the fact that millennials can be more flexible around parking spaces, and may be willing to trade it off for other amenities.

Another one that jumps out is storage space, with a similar level of difference. Perhaps it’s just a natural fact of life – as you get older you end up with more stuff.

Still, it means if we’re marketing to younger couples or families, they may not be putting such a premium on storage space.

The bedroom one jumps out at me and does seem a little strange. I would have thought that baby-boomers might be empty-nesting, and be very willing to give up a bedroom to live in a better location. But it doesn’t seem to be the case.

(Perhaps the kids’ bedroom has already been converted to an entertainment room, and they’re reluctant to give that new luxury up.)

By the same token, I’m surprised that so many millennials would be willing to give up a bedroom (though still only 25% of them). I would have thought as you came into your nesting years, bedrooms would be a priority. But less so, it seems.

So what’s the general trend that’s emerging here?

The stylisation is probably that baby-boomers are less willing to make sacrifices for location, while millennials are more amenable to the features of higher-density living. They’re more willing to give up garages, storage space, even bedrooms.

I think this is interesting.

The housing stock needs constant updating, and tastes are always changing. There was a time when renovating meant putting up wall-paper. Nobody does that anymore.

And if we’re renovating for profit or equity uplift, and we’re in an area that’s attractive to young people, there may be considerable gains to be made by sacrificing garages or storages spaces for an extra bedroom or a bigger, better kitchen.

Again, this is US data, so be a little wary, but I reckon it would be a very similar picture in Australia. That’s my sense of it.

What do you reckon? Has it got you thinking?