{"id":9127,"date":"2016-09-06T01:00:04","date_gmt":"2016-09-05T15:00:04","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=9127"},"modified":"2016-09-06T01:00:04","modified_gmt":"2016-09-05T15:00:04","slug":"housing-it-is-not-a-forever-decision","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/housing-it-is-not-a-forever-decision\/","title":{"rendered":"Housing &#8211; it is not a &#039;forever&#039; decision &#8211; Mark McCrindle"},"content":{"rendered":"<p>&nbsp;<br \/>\nDemographer, futurist and social commentator, <strong>Mark McCrindle<\/strong> says \u2018your first home isn\u2019t likely to be your forever home\u2019 but that doesn\u2019t stop some people spending too much time worrying about their first purchase. You might be surprised to hear the average number of properties we live in during our lives, how long we stay in them and how that has changed over the decades. I know I was.<br \/>\n&nbsp;<\/p>\n<h4><strong>Transcript:<\/strong><\/h4>\n<p><b>Kevin:<\/b>\u00a0 There was an article that was out earlier this week that said your first home isn\u2019t likely to be your forever home, and it got me thinking about how many people actually live in a home that they were actually born in and whether or not this mindset makes us maybe choose the wrong house or maybe puts us into a mode where we find it very hard to make a decision.<br \/>\nHow many people actually buy one house and live in it forever? Joining me to have a look at the stats around this on Australians and the homes they live in is demographer, futurist, and social commentator, Mark McCrindle.<br \/>\nGood day, Mark.<br \/>\n<b>Mark:<\/b>\u00a0 Good day, Kevin.<br \/>\n<b>Kevin:<\/b>\u00a0 Nice to be talking to you again.<br \/>\n<b>Mark:<\/b>\u00a0 Likewise.<br \/>\n<b>Kevin:<\/b>\u00a0 Mark, how many people actually do buy one house and then live in it forever?<br \/>\n<b>Mark:<\/b>\u00a0 Very, very few these days. In fact, the trend lines are for us to be moving homes far more frequently now than we did in the past. One of the biggest drivers of that has been the massive increase in the numbers of people renting and renting for longer periods. We know from the Australian Bureau of Statistics data that the average renter stays 1.8 years per home.<br \/>\nEven if you have ten years in your twenties where you\u2019re doing the rental thing, which is mainstream now \u2013 a lot of people have been renting for a lot longer than that \u2013 that\u2019s five homes at least just in that ten-year period.<br \/>\nWe know that those who are paying off their home \u2013 and actually the majority of all households still have a mortgage \u2013 they have an average tenure of eight years per home, so that\u2019s not the 30 or 40 years of home ownership that perhaps our parents\u2019 generation had, but eight years.<br \/>\nThat\u2019s because people will buy their first home \u2013 maybe it\u2019s a unit or apartment \u2013 and they\u2019ll pay that down a bit, and then they\u2019ll jump up to maybe a townhouse as the kids come along or they need a bit more space, then maybe to a smaller home and then maybe another home down the track. We\u2019re cycling through more property \u2013 even when we own it \u2013 than ever before.<br \/>\n<b>Kevin:<\/b>\u00a0 I\u2019ve often thought, too, that a lot of people agonize over making that first purchase decision thinking that this is going to be the place they want to live in for the rest of their lives when it\u2019s really only, as you\u2019ve just demonstrated, sometimes quite a short-term prospect.<br \/>\n<b>Mark:<\/b>\u00a0 Exactly right. That\u2019s eight years average, of course. Some people have the 25-year mortgage, they\u2019re paying that home loan off over a long period, which means a lot of people are buying a home, living in it and moving on every three, four, or five years, so that\u2019s the median.<br \/>\nThose who have paid off their home, if we track those, have been in their homes on average 18 years. That\u2019s the older generation. That was the traditional way, the Aussie Dream; you buy the forever home and you stick with it. But as for the next generation coming through carrying the debt of the mortgage on that home longer, far more churn than ever before.<br \/>\n<b>Kevin:<\/b>\u00a0 Have you got any idea on how many homes the average Australian will live in during their lifetime?<br \/>\n<b>Mark:<\/b>\u00a0 We have done some figures on that, and it sounds astonishing, but if we think of the number of homes, whether we own or rent, throughout the full lifecycle, it\u2019s 15, which is a lot. We have about three homes in our upbringing before we move into the adult years just based on the parents moving a little bit and maybe that trial move out of home and then bouncing back when the costs get too high.<br \/>\nThere are three there, and there are three homes that we\u2019ll live in in our retirement years. There\u2019s the downsizing home, there\u2019s maybe a shift to retirement living, maybe supported age care down the track, which means that there are nine homes that we\u2019re living in in our adult years.<br \/>\nMany of those homes are in that mortgage period, as I said, for the decade or so, but then you have the three or four homes that people will own in their adult years, as well. That\u2019s just a lot of churn, 15 different premises in which we will live in our lifetime.<br \/>\n<b>Kevin:<\/b>\u00a0 Mark, it\u2019s interesting, isn\u2019t it? I think you mentioned the average stay time is about 18 years if you\u2019re purchasing a home, and if you think about that, that allows the kids to grow up. I\u2019m just wondering about today\u2019s youth, whether or not they\u2019re staying at home a little bit longer, maybe moving with mom and dad, or are they just moving out?<br \/>\n<b>Mark:<\/b>\u00a0 They are staying at home longer than ever, into their twenties \u2013 and indeed, closing in on the mid-twenties is now the norm. But interestingly, the Bureau of Statistics did a study on this and found that all of those mid-twenty-somethings who are living in the parental home, half of them had already moved out and moved back again.<br \/>\nIt seems in Australia as if we do stamp our independence maybe in the uni years or maybe just after uni, moving out with their friends, trying out the home share, maybe even renting your own place, and invariably, when it comes time to save a little bit more for the mortgage of one\u2019s own place or just with the rising costs, people move back to the parental home. That\u2019s what takes place there.<br \/>\nYes, parents are supporting their children in the parental home a little longer, which can be helpful, but that creates this multi-generational household more than we ever had before where you have the adults there and often their twenty-somethings still living under one roof.<br \/>\n<b>Kevin:<\/b>\u00a0 Fascinating. I\u2019m talking to Mark McCrindle, and you can follow Mark at his website, McCrindle.com.au.<br \/>\nMark, we\u2019ve established that our first home may not be our forever home. Are first homes still fairly typical of the way that they were in, say, the 1950s and 1960s \u2013 three bedrooms, one bathroom, one lounge?<br \/>\n<b>Mark:<\/b>\u00a0 No. We\u2019re getting a lot more in our homes. This is where some of the figures\u2026 We\u2019ve done a lot of this calculation that if you go back four decades ago to, say, our parents\u2019 generation, when they were buying their first homes \u2013 the young people of today, their parents \u2013 in the mid-1970s, the average home was five times the equivalent of average annual earnings. Today, it\u2019s ten times those average annual earnings, so in a sense, it\u2019s twice as much. You have to save twice as long to get that home.<br \/>\nBut if you think about the average home of today, it\u2019s a lot bigger and better equipped than the average home of the mid-1970s. Our expectations of our first home is quite different. Baby Boomers are quick to point this out, but yes, we got our first home a bit younger than our children\u2019s generation, but that\u2019s because we were prepared to take that little flat on the outskirts of town, not get the latest furniture, use hand-me-downs for a fair while, and pay that thing off.<br \/>\nThere was a different attitude to home ownership then. We wrote a report on this recently and said many in the Generation Y category expect to start their home life in the manner in which they\u2019ve seen their parents finish their home life, in a nice home in a nice part of town. That\u2019s not how it used to be and it\u2019s not always possible.<br \/>\n<b>Kevin:<\/b>\u00a0 Fascinating. I know you\u2019ve done a lot of work, too, on the wealth of Australians, and I know that we quite often talk about how the older generation have built their wealth on housing. You\u2019ve had a look at this. Can you give us some stats on what you found out?<br \/>\n<b>Mark:<\/b>\u00a0 That\u2019s right. The Baby Boomers have done very well, and that\u2019s because they did follow that traditional Aussie dream of home ownership. It was a bit more affordable, as we\u2019ve said, for them, but it\u2019s a home ownership and paying down their mortgage has the extra benefit, for wealth purposes, of forcing one to save and to pay down that debt.<br \/>\nThe downside for Generation Y is that because homes are harder to buy, they\u2019re not buying those homes, but they\u2019re not investing that money that otherwise would go into a home into some other appreciating assets \u2013 shares, etc. \u2013 but rather, renting and then with a bit more of that cash that they have available, spending that money on lifestyle pursuits, travel, and the like, which is great for the lifestyle but doesn\u2019t create a nest egg for them.<br \/>\nSubsequently, we have the Baby Boomers who are a quarter of the population earning 53% of Australia\u2019s national private wealth \u2013 more than half owned by one quarter \u2013 whereas the Generation Y, 15% of the population owns 7% of the national wealthy. Their economic footprint is just half of their demographic one. Now, they have a lot of wealth accumulating years to go, but they are further behind where their parents were at the same age.<br \/>\n<b>Kevin:<\/b>\u00a0 It\u2019s reflecting priorities, I think, isn\u2019t it? I know in my generation, getting the house was the most important thing. It was bred into us. You have to get that first house, then hold onto it and build your wealth that way. I\u2019ve spoken to a lot of young people who say, \u201cI think I\u2019d much rather travel. I\u2019d much rather have a little bit of flexibility about what I do.\u201d To them, it doesn\u2019t seem to be as important, Mark.<br \/>\n<b>Mark:<\/b>\u00a0 It doesn\u2019t, and it is a generation more focused on the journey than the destination, a bit more living for the now. There are some great benefits to that: the life experience and the travel. That\u2019s something to be appreciated. The study that they\u2019re investing in, also, is going to set them up well, but it can create and delay the financial challenge of the future because it\u2019s not getting easier to own.<br \/>\nIf we look at Generation Y, they\u2019re a high-income-earning generation with a low net wealth: income rich, asset poor. The average Generation Y household annually is bringing in $113,000. That\u2019s some pretty good money coming in, and that would be enough to get hold of some sort of property, maybe not to live in \u2013 it might not be where they want to live, but at least getting a foothold.<br \/>\nBut there does seem to be a bit of a negative sentiment that \u201cOh, it\u2019s impossible to own a home; I\u2019ll just be a lifelong renter,\u201d and that can create a vicious cycle of non-gain in wealth accumulation.<br \/>\n<b>Kevin:<\/b>\u00a0 It\u2019s almost like a resignation, isn\u2019t it? It\u2019s like \u201cI\u2019m just resigned to the fact that I\u2019ll never own a house now, so let\u2019s just get on with life.\u201d<br \/>\nBefore I let you go, I\u2019ve certainly held my average up. I think just doing some quick calculations, I reckon we\u2019ve been in at least 20 houses. What about you?<br \/>\n<b>Mark:<\/b>\u00a0 I\u2019m probably halfway through that lifecycle. I\u2019m probably up to about seven or eight. I\u2019m probably slightly above the average, as well, in that regard. I\u2019m probably part of that era where there\u2019s just a lot of churn.<br \/>\n<b>Kevin:<\/b>\u00a0 I think in my job, too, in radio, we tended to move around quite a lot. I think in the early days when we first got married, we were actually moving quite a lot. Anyway, that\u2019s just the way it goes.<br \/>\nMark, it\u2019s great talking to you. Thank you so much for your time. Mark McCrindle has been my guest, and that website again is McCrindle.com.au. Thanks, Mark.<br \/>\n<b>Mark:<\/b>\u00a0 Thanks, Kevin. I appreciate it.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Demographer, futurist and social commentator, Mark McCrindle says \u2018your first home isn\u2019t likely to be your forever home\u2019 but that doesn\u2019t stop some people spending too much time worrying about their first purchase. You might be surprised to hear the average number of properties&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":7968,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,17,22,25,27],"tags":[101],"class_list":["post-9127","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment","category-research-topic","category-sponsored-channels","category-trends-topic","tag-podcast"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Housing - it is not a &#039;forever&#039; decision - Mark McCrindle - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/housing-it-is-not-a-forever-decision\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Housing - it is not a &#039;forever&#039; decision - Mark McCrindle - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; Demographer, futurist and social commentator, Mark McCrindle says \u2018your first home isn\u2019t likely to be your forever home\u2019 but that doesn\u2019t stop some people spending too much time worrying about their first purchase. 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