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A survey has revealed a generational shift in housing preferences, with Generation Z focused on apartment living as an affordable option.
The survey by Commonwealth Bank of Australia (CBA) subsidiary Bankwest has found that 28 per cent of Gen Z would prefer an apartment if they were to purchase property immediately, almost double the national average of 15 per cent.
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Only 15 per cent of Gen X (aged 39 to 53), 14 per cent of Millennials (aged 23 to 38), and 11 per cent of the Baby Boomer generation (aged 54 to 73) said they would most likely choose to purchase an apartment, the survey of 1,600 respondents revealed.
Most of Gen Z – aged between 14 and 22 – still reported that they would prefer to purchase a detached dwelling, but only 45 per cent said they would prefer this option, compared with the national average of 60 per cent, Bankwest said.
The bank attributed these shifts in generational trends to the financial position of the Gen Z cohort, as 50 per cent of the youngest segment cited “low cost of living” as an important consideration when buying property, compared with the national average of 40 per cent, while 38 per cent wanted “cheap” property, compared with the 22 per cent average.
In addition, 61 per cent of Gen Z said the coronavirus pandemic has made it “more important” to find property that is “cheap”, compared with the average 41 per cent.
Detached dwellings are the preferred property type across generations, with 60 per cent of Millennials, 64 per cent of Gen Z, and 65 per cent of Baby Boomers preferring this option, the figures showed.
This is despite detached houses continuing to outperform units, with April CoreLogic data showing that house values rose by 8.6 per cent over the first four months of the year at the combined capital city level, which was double the pace of rise in unit values (4.3 per cent).
The survey also showed that more than half of all respondents (56 per cent) said that they would prefer a home that was ready to move into, while 66 per cent of Baby Boomers, 53 per cent of Gen Z, and 49 per cent of Gen X said so.
According to Bankwest, Millennials (aged 23 to 38 years old) have also been prioritising affordability, with 14 per cent searching for a “home that needs renovating”, compared with an average of 10 per cent, while they are the least number of all generations wanting a ready-made home (47 per cent).
It also said that Millennials have proved to be the least fussy of all home buyers, reporting significantly lower than the national average on all top 10 factors of what is important when choosing a property to purchase.
For example, 42 per cent prioritised a safe location compared with a 57 per cent national average, 28 per cent wanted a secure location compared with 37 per cent, while 32 per cent prioritised being close to key infrastructure compared with a 42 per cent average.
Bankwest said the findings could potentially point towards the “realities” of Millennials – which it said was the most active home buyers – that they are less inclined to focus on factors appealing to other generations and instead focus on affordability.
Commenting on the findings, Bankwest general manager home buying Peter Bouhlas said that owning a home is still the “Great Australian Dream”, and added that it is fitting that this dream might differ between the generations.
He said: “It’s clear from the findings, though, that the dream of owning your own home is alive and well for most Australians – it’s just what that home and dream looks like that differs between the generations.”
Mr Bouhlas also said that with affordability becoming a larger issue for Gen Z, it is also fitting for them to lean more towards apartment living compared with their older counterparts.
“We believe this preference is driven by two key factors, with the first being a shift in lifestyle and a desire to find a home in, or close to, urban city centres, but then there’s also the practical need to find a home that’s affordable,” he said.
“So, these findings might be pointing towards permanent changes in preferences, but it’s also possible Gen Z’s priorities will shift as their circumstances change, even though many were already considering the future.”
Mr Bouhlas concluded: “It’s interesting to contrast the attitudes of Gen Z – the next generation of buyers – with Millennials – the market’s current buyers – because, while house-type preferences differ, they share a mutual priority on affordability.”
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