The Australian housing market has a bright future, and Gen Ys will be the ones to lead it there, a social demographer has claimed.
In spite of growing pessimism surrounding the economy, KPMG partner Bernard Salt has told Australian BrokerNews he expects economic conditions to pick up within the next few years. Salt claimed much of the economic pessimism in the housing market is merely reverberations from the GFC.
“We are in the shadow of the GFC at the moment. When you’re in the shadow, it’s cold and bleak and you can’t see beyond the darkness. By 2012, 2013 or 2014 we will have left it behind. You can’t be moping around after a recession forever,” Salt commented.
Salt believes Gen Y buyers will be responsible for reinvigorating the housing market in the coming years. He said Gen Ys are not affected by post-GFC malaise that has seen many consumers tighten their belts and retreat from the housing market.
“I don’t think Gen Y were really particularly affected by the GFC. They weren’t married, they don’t have a mortgage, they don’t have kids. There’s sort of a brash optimism. It will be they who move us forward,” he said.
Though first home buyer participation has fallen to 15.8% of all housing finance, Salt believes Gen Ys will soon begin to enter the housing market in earnest. He commented that Gen Ys will stimulate first home buyer activity as both their optimism and the necessity to “grow up” pushes them into property ownership.
“They have to move into household form pretty quick-smart,” he said. “They can’t hang around and pretend to be the people from Friends forever. Ultimately, the practicalities of life force you to do that. You can’t be footloose and fancy-free at 33. You can do that at 23, but you can’t do that at 33.”