Huh? What do they have in common? In the same way that every decade brings with it a new style, it will come as no surprise that the perception of what a first home should comprise also changes considerably. The expectations and needs of buyers today are very different to that of purchasers in previous decades.
Haircuts are (relatively) cheap and easily changed. But first homes are limited by income, housing and land affordability and even linked to that most human of factors – aspiration. How have the trends changed over the years?
To get a clearer picture of Canberra’s evolving first home buyers’ market, we spoke with Matt Peden, Principal of the Independent Property Group’s Belconnen office. We asked Matt for his insights gained during many years in the property industry. (We didn’t consult him on hairstyles.)
1980s: The decade of excess.
Hairstyles were boofy – the bigger the better! But this didn’t translate to the expectations of Canberran first home buyers. A basic 3 bedroom house with one bathroom was the entry level point for most families. Ex-government housing was affordable and not yet in desperate need of a renovation. By 1988 Canberra’s population was only a fledgling 270,000 and there were few newer suburbs created than in the previous decade.
Matt’s experience was that during the 80s first home buyers were seeking homes that enjoyed a secure yard for growing families with room to extend when finances allowed. First home buyers also expected to stay put for a lot longer than those today. They liked to plant roots, and it’s not uncommon for first home buyers in the 80s to still be living in their original home – but with renos in later years.
1990s: The recession we had to have!
It was time to tighten the belt, and the reality of being short was upmost in our minds. Australia suffered under the weight of an economic recession in the early 1990s, sparked by the 1987 stock market crash. Mortgage rates were high, however it didn’t stem the tide of first home buyers and 3 bedroom homes were still well within reach of those were looking ahead to increased comfort for their growing families (no more bathroom sharing!).
The market was highly competitive and the new home market in particular saw a lot of smaller floorplans cleverly designed with minimal hallways and open plan to allow prices to stay lower while still on a reasonable sized block. Matt recalls: “Some 3 bedroom homes with lock up garages even started under $100,000… those were the days!”
2000s: McMansions – the equivalent of upsizing your meal.
Would you like fries with that? There was no hiding it under your hat – this was a decade of contrasts. Although lifestyle and reality shows had begun to hit our TV screens and shows such as ‘The Block’ revitalised our interest in renovation, we also saw the dawn of the McMansion. Blocks of new land releases were smaller, and there was a desire to capitalise on what could be built on that smaller space. A result of the McMansion phenomenon was that many first home buyers were coaxed into buying homes that were larger than they needed and placing themselves heavily into debt. Housing bubble, anyone?
Matt’s experience was that during the Noughties first home buyers were increasingly seeking financial cooperation from partnerships; either siblings, parents or potential life partners, since single incomes made it a lot tougher to get finance approval where prices had increased. He says: “Tenants in Common contracts made a lot of sense in these cases allowing flexibility in joint ownership of property.”
2010s: A rise in apartment lifestyles.
Remember the Fauxhawk – that perfectly groomed version of the Mohawk? Over the last couple of years it’s been replaced with a hipster look and lifestyle. But what’s happening now for first home buyers? It’s less affordable, and more and more young people are staying at home for longer while saving a deposit. No longer the pure domain of inner urban living, apartment living is increasingly in demand for singletons or young couples, who want innovation but also low-maintenance for their first home, whether it’s in newer or more established suburbs.
Matt is pragmatic: “First home buyers are doing whatever they can to enter the market. I think young people these days are very educated and have the common sense to buy what they can afford now even if they don’t see themselves living in it for ever. Current first home buyers seem to have a plan to get to where they need to be and in a clever, calculated way build equity. While enjoying their current home, they have their next step already within their goals.”
Currently some first home buyers sport a hipster look and lifestyle. But we’re probably close to the end of that trend. Matt’s prediction for first home buyers (and by the way, his hair is always on point although he doesn’t sport a beard or glasses), is that not much will change for first home buyers going in to the last half of this decade. “A little more of the same, given that land prices have made affordability a challenge. But proactive builders and land developers are creating affordable housing options to give first home buyers their 1st step in the property market. I believe that the comfort of living in your own home where every monthly payment pays your mortgage and not the landlords is one that surpasses any compromise for your first home.”
Matt says: “You go into it knowing that you’re one step closer to the show home you dream of as a more permanent home. The younger generation are smart and forward- thinking, this is why I hear mostly positivity from the first home buyers I deal with.”
So whether you’re currently seeking your first home, or reflecting on your own first experience, this snapshot of past trends clearly demonstrates that each decade presents its own challenges, but right now the future is looking brighter for practical first home buyers than you may have heard recently.
Ahead, we’ll be reviewing how some of the doomsayers are telling first home buyers it’s difficult to get into the market. But are they telling the whole story? It’s easier than you may think!