Key Trends Reshaping the Australian Property Market
The Australian property market is undergoing significant transformations, driven by evolving demographics, changing buyer preferences, and broader societal shifts.
These factors are not just influencing the market—they are fundamentally reshaping the landscape of property investment and homeownership across the country. Below, we explore the key trends that are defining the future of real estate in Australia.
1. Millennials Dominating Home Purchases
Millennials, born between 1981 and 1996, are now the largest group of first-time homebuyers, making up about 34% of all first-home buyers in Australia.
As they reach the typical home buying age of around 35, their preferences are having a significant impact on the market.
Millennials tend to prefer flexibility, with many opting for renting over buying or choosing smaller, more affordable homes like townhouses or apartments.
This generation is driving demand for specific property types and influencing where these properties are being developed.
2. A Longer Journey To Homeownership
For younger buyers, the journey from renting to owning a home is taking longer. The average age of first-time homebuyers in Australia has now risen to 36 years, with many taking up to 10 years to save for a deposit due to high property prices.
As a result, many are starting with smaller homes or apartments as their first purchase. These properties serve as stepping stones before they can afford to upgrade to a larger family home. This trend is increasing the demand for affordable, compact living spaces.
3. New Homeownership Models
With traditional paths to homeownership becoming more challenging, buyers are exploring alternative methods. Options like fractional ownership, shared equity, and cooperative purchasing are becoming more popular, allowing multiple people to share the cost of buying a property, making it easier to enter the market.
To support first-time buyers, the Australian government offers several schemes, such as the First Home Loan Deposit Scheme, which allows eligible buyers to purchase a home with a deposit as low as 5%, and the First Home Super Saver Scheme, which offers tax benefits for saving towards a house deposit through superannuation.
4. Increase in High-Density Living
Australia’s population is growing, especially in urban areas, leading to a rise in high-density living. Over the past decade, the median lot size in Australia's major cities has decreased by 30%, reflecting the shift towards more compact living.
Government initiatives aimed at increasing housing supply are supporting this trend. As a result, cities are seeing more developments such as apartments and townhouses, which make efficient use of limited space. This trend is expected to continue as urban populations grow.
5. Demand for Sustainable Housing
Environmental concerns are driving a growing demand for sustainable and energy-efficient homes. In 2023, 45% of new homes built in Australia included solar panels as a standard feature, highlighting the increasing importance of sustainability in the housing market.
Buyers are increasingly looking for properties with eco-friendly features, such as solar panels, energy-efficient appliances, and water-saving systems.
Developers are responding by incorporating these features into new homes, and existing homeowners are retrofitting their properties to meet these standards. Sustainable homes are becoming more valuable and sought after in the market.
6. Rise in Long-Term Renting
As homeownership becomes less attainable for many, renting is becoming a long-term option. The proportion of Australian households renting has risen to 32% in 2024, the highest level in more than two decades, reflecting this growing trend.
The rental market is expanding to offer a wider variety of housing options, including luxury apartments, co-living spaces, and purpose-built rental developments. This shift is driven by affordability issues, lifestyle preferences, and a desire for flexibility.
As more people choose to rent long-term, the rental market is gaining influence and driving changes in the property sector.
7. Impact of Technology on Real Estate
Technology is rapidly changing how properties are bought, sold, and managed. The PropTech sector in Australia grew by 25% throughout 2023, with significant investment in AI-driven property management and blockchain-based transaction platforms.
This rise of PropTech, including tools like virtual tours, artificial intelligence, and blockchain, is making real estate transactions more efficient and transparent. These technologies are providing better access to data, streamlining processes, and reducing costs, which is transforming the real estate industry. As technology continues to evolve, its impact on the property market will only grow.
Stay Ahead in the Changing Property Market
As the Australian property market continues to evolve, staying informed and adapting to these changes is crucial for both investors and homeowners.
At Aurora Realty, we’re here to help you navigate this dynamic market with expert guidance and tailored property management solutions.
Whether you're a seasoned investor or just starting out, our team is dedicated to maximising your property's potential and ensuring your investment thrives.
Ready to take the next step? Contact us today to discover how we can support your property goals and keep you ahead of the curve.