Housing Affordability in NSW [infographic]

Monday, January 30, 2017

We’ve all heard about the difficulty of buying into the housing market in recent times and the subsequent decreases in home ownership rates (in NSW, from 68% in 2004 to 63% in 2014). With less people able to afford a home in the current market, there have been increases in the numbers of people looking to rent in New South Wales, and particularly Sydney.

We were delighted to be commissioned by Churches Housing and Shelter NSW to uncover the story of rental unaffordability in New South Wales. Through this research, we discovered that finding an available, affordable rental property is becoming increasingly difficult, particularly for those in the bottom 20% of income earners.

The decrease in the availability of rental properties over the last decade or so, has been influenced by a number of factors. Rental prices have increased due to the increased numbers of people looking to rent, and in past decades, rental prices have grown faster than income.

The infographic particularly highlights the difficulties for the bottom 40% of income earners in looking for appropriate rental properties. The term ‘rental stress’ is used to describe those in the bottom 40% who are spending over 30% of their income in housing costs. In 2013-14 NSW had the highest proportion of low income households experiencing rental stress, at 76% (compared to 68% nationally). For these households, rental stress can impact on other areas of life, including health care, schooling, diet and in the worst case can sometimes lead to homelessness. 


The Shopper's Pick: Understanding Australia's new village green

Thursday, July 14, 2016

This year we were delighted to write up and design the third and latest report in the Trolley Trends Series, ‘The Shoppers Pick’ for Woolworths Limited. From developing the survey through to conducting the analysis, this report is the perfect blend of quality research with segmentation and visuals, making the research easy to consume.

With 1 in 5 (20%) Australian supermarket customers going to the supermarket at least once a week, the report reveals that a record number of people (44%) consider the local shopping centre to be central to community life and has truly established itself as the new village green – a place for connection and engagement with the wider community, perhaps even more so than the local pub, school or community centre.

It is the theme of local which is clearly the key message of ‘The Shopper’s Pick’, which provides a unique look into modern Australia’s living, eating and shopping habits today.


A GLOBAL NATION WITH A PASSION FOR LOCAL

As Australia becomes increasingly connected to global economies and new technologies, there is an equal if not stronger desire among shoppers to support Australian made products and local growers. It is increasingly important to Australian shoppers to know where their food comes from.

More than half of Australian shoppers (52%) state that buying local food is extremely or very important to them. In fact, around a quarter of shoppers prefer to purchase meat and poultry, bread and grains, and seafood and fish that are sourced locally in their own region rather than sourced further afield in their own state or within another region in Australia.


AUSTRALIA’S SEASONAL PERSONALITIES

Australians are impacted in different ways by the changing seasons. Australia’s Seasonal Personalities explores the different personalities of Australians and the impact seasons have on their lifestyle. Which Seasonal Personality are you?

THE HEALTH REVOLUTION

Australians are becoming increasingly health conscious and aware of the foods they consume. This trend towards healthy eating is demonstrated in the increase of health foods being included by Australians in their weekly shop.

Just over half of shoppers (52%) buy health food products weekly (i.e. sugar free, additive free, gluten free, dairy free, organic, raw, salt free or vegan), with sugar free products the most likely to be on Australians’ shopping lists and purchased by just over half of shoppers (51%), followed by organic and raw foods (both at 35%), and additive free foods (27%).


VALUE SWAG: A NATION OF CREATIVE SAVERS

Australians are a nation of savvy shoppers, who seek products that are value for money. Nearly 7 in 10 shoppers (69%) state that buying on discount is extremely or very important to them. These values are reflected in the ingredients they purchase for meals cooked at home, with 99% of Australian shoppers saying price is an important factor they take into consideration. As part of being savvy shoppers, Australians are also creative savers. Almost 6 in 10 shoppers (58%) save money by purchasing groceries based on weekly specials, while just over half (52%) save money by writing a shopping list and sticking to it. Stocking up and bulk-buying are two other ways Australians save money, with just over half of shoppers (53%) currently saving money by stocking up on discounted non-perishables.


This report follows on from the 2014 Trolley Trends Report which focused on the increasing importance of ‘Fresh’ amongst the Australian population. The report also found that one of the most common community connections for Australians is the local shopping centre. To access the Future of Fresh report, please click here.

Australia's Household Income and Wealth Distribution

Tuesday, June 21, 2016

Land of the middle class?

Australia has long been labelled the land of the middle class but the latest analysis of the Australian Bureau of Statistics wealth and income data shows that this is less the case today.

Household income by quintiles

This infographic of annual household income by quintiles (20% categories, each comprising around 2 million of Australia’s 10 million households) shows the spread of total earnings. While the average household annually earns just over $107,000, the top 1 in 5 earns more than twice this (exceeding $260,000) while the bottom 1 in 5 takes home around one-fifth of this (a little over $22,000). This means that while the bottom fifth of households get 4% of all income, the top fifth get almost half of all earnings (49%).

Highest fifth have incomes 12 times the lowest fifth

The top quintile in gross terms earn almost as much as the other 80% of households combined. In ratio form, the highest quintile households average 12 times the average bottom quintile income.

Gini coefficient shows growing income divides

The Gini coefficient is a measure of income spread, with 0 being perfect equality and 1 being total inequality. The latest data shows that it is now at its highest (most unequal) level ever at 0.446 compared to 0.417 in the mid 1990’s. In the 20 years since, average household gross incomes have increased 60% from $66,196 to $107,276 today while over the same period, incomes of the top 1 in 5 households (highest quintile) have increased by 74% from $149,552 to $260,104.

Highest earners also had highest income growth

In the decade since 2005-06, most of the household categories have seen income increases of 18-19% with an average increase of 24% ($20,956 increase from $86,320 to the current $107,276) while the highest quintile has enjoyed income increases of 30% ($60,528 higher than a decade ago, up from $199,576 to $260,104).

Household wealth by quintile

Accumulated earnings are best represented by net wealth, and this is where the changing economic landscape is even more dramatically presented. While the average Australian household has net wealth of $809,900, the highest quintile household on average has a net wealth more than three times this ($2,514,400) while the lowest quintile household wealth is just a fraction of this (4% of the average wealth, or $35,500). The lowest 20% of Australian households own less than 1% (0.9%) of the national private wealth while the highest 20% own 62% of the national private wealth.

Wealthiest 20% own 71 times that of the lowest 20%

The wealth of the highest quintile households on average is 71 times that of the lowest quintile households. While the average Australian household has seen wealth increase by 6% in the last 2 years (an increase of $45,400), the highest fifth of households have averaged increases of 8% (an increase of $189,500). Only upon reaching the fourth of five quintiles does the average household net wealth ($830,600) exceed the average house price ($720,000), while the highest quintile households on average have a net worth exceeding 3 average Australian homes.

Wealthy have net worth many multiples of income

The net wealth of the lowest quintile is just 1.6 times annual income, for the average household wealth is 7.5 times incomes while for the highest quintile, their wealth is almost 10 their average annual income, and more than 23 times the average Australian household annual income.

Does Generation Y have it easier than the Baby Boomers?

Thursday, April 14, 2016

Generation Y are today’s 22 – 36 year olds, and make up 22% of the Australian population (5.22 million). They also make up the largest cohort in the workforce (34%). Gen Y’s are comprised of today’s parents, senior leaders, influencers, and increasingly wealth accumulators. With 1 in 3 being university educated (compared to 1 in 5 Baby Boomers), they have grown up in shifting times and are digital in nature, global in outlook and are living in accelerated demographic times.

Our Research Director, Eliane Miles, chats to Tony Delroy from ABC Nightlife about the future of Generation Y and whether we need to stop giving Gen Y a hard time.

Eliane, can you compare the wealth of the baby boomers at 25, to Gen Y at the same age – what story do the figures tell?

Well earnings have certainly increased, with average annual full-time salary in 1984 at $19,000 compared to $80,000 today. However houses were also cheaper, with the average price of a residential property costing just $64,000 compared to more than 10 times that across the nation today. In 1975, the median house price was just 5 times the average full-time earnings, but in 1996 this increased to 6 times and today it currently sits at 13 times! Property was cheap, and while it was more difficult to borrow, Baby Boomers were raised with a saving mindset so made the most of their hard work.

There has been a stereotype of Generation Y being demanding in the workplace, not being prepared to put in the hard yards at the bottom of the rung, of not holding loyalty towards employers – to what extent do you think any of those stereotypes ring true?

These stereotypes are the same stereotypes that were made 15 years ago towards Gen X. That somehow the economic mishaps of Gen Y are their own moral failure (lazy, expect too much, spend too much time on social endeavours). Yet there’s a lot of other factors at play and it’s not entirely bad. They’re not locking into a job the same way as their parents (average tenure is 2 years and 8 months for Gen Y compared to 6 years and 8 months for Baby Boomers) but it’s not all bad. Enduring education longer, staying at home longer, the reality of formal education and global connectedness means they’re more equipped and resourced to collaborate in the 21st century, more able to engage in a diverse workforce and lead in collaborative ways.

The fact that Gen Y’s value work-life balance is a good thing, they are less likely to get burned out, more relatable to life, not just saving their leave for one day in retirement but bringing life. Older generations bring experience and structured thinking, younger generations bring innovation, 21st century education, and greater cultural diversity to the working world.

Eliane, do you think there are certain expectations that Gen Y grew up with that they’re suddenly wondering if they’re actually going to happen?

Yes certainly. Gen Y’s saw the miracle wealth accumulation that their Baby Boomer parents had, and expect to start their economic lives in the same way their parents are ending theirs. Now, there’s a realisation that all of the factors that set up the Baby Boomer generation probably won’t be on-side for Gen Y. They’ve dreamt of having it all – the house, the car, the annual overseas trips, the dining out … but the reality of what they’ve been handed is that one or perhaps more of those things need to go.

How was the economic environment different for young baby boomers compared to young Generation Y’s?

Baby Boomers were handed a series of fortunate events. Rather than looking at income in the mid-20s let’s compare the two environments in which they became wealth accumulators.

Firstly, the path begins with their birth (1946-1964), a period of time or remarkable economic development after WW2 (post-war rations, high rate of savings). Beliefs about what the government should provide (health care, education, unemployment, and tax benefits) have reflected the priorities of this generation and the environment that they were raised in.

Then they benefited from the good economic times in the late 1990s and early 2000s, as they were already in the property market. Baby Boomers had a 27 year period of uninterrupted economic boom (from the recession in the early 1990s to 2008) which is likely to be unprecedented and never again seen among Australians of any generation.

Now the tables have turned.

Gen Y didn’t get access to free education, cheap rent while saving or union-protected and secure jobs. Young people today have little prospect of owning a home, so consumer spending improves their quality of life. Baby Boomers have a larger share of the pie while Gen Y, nor any other generation following the Baby Boomers for that matter, will reach a similar landmark. They benefited from advantageous tax systems and modest taxes. Their generation thrived in a unique, economic miracle.

But it’s not all bad news for Gen Y.

Australia is one of the few wealthy countries which has seen disposable income growth be higher for those aged 25-29 than those aged 65-69, with 27% growth compared with 14% growth between 1985 and 2010.

When it comes to homeownership amongst Gen Y members, how do they compare to the generations before them at a similar age?

In 1981, 61% of those aged 25-34 owned their own home and in 2011, this figure had dropped to 47% of those in the same age bracket. Across the board (not just in the younger years) we’ve seen a decline in home ownership. 20 years ago, 42% of Australians owned their home outright, which has decreased to less than 30% today. Furthermore, just 26% were renting, which has grown to almost a third today (31%).

So why this decline? This can be attributed to the emergence of single-person and single-parent households, the growing gap between house prices and average weekly earnings and tax concessions to owner occupiers. With government policies being geared towards home ownership, this means that Gen Y’s who start their earning lives later risk spending more of their income on housing costs when they retire.

Let’s set the crystal ball 50 years into the future – Eliane what do you see for Gen Y in 2066?

Demographically, Australia’s population will certainly have grown – Australia will have over 40 million people, Sydney over 8.4 million and Melbourne 8.5 million, having overtaken Sydney as Australia’s largest city by 2056. Migration will continue to drive growth, and with increasing cultural diversity and greater influence from Asia, the population growth will continue to drive house prices upwards.

Australia’s population will also be ageing. 58% of the population will be in their 50s or older in 2066, one quarter will be over 65 and 1 in 6 will be over 75. In a nutshell, there will be more people aged over 60 than under 20.

And lastly, we will have changed a lot in that time as well. In 2066 Gen Y’s will be aged 72 to 86, and Gen Z’s (those now aged 7-21), of whom there are already 4.43 million in Australia (comprising 18% of the population), will be nearing their retirement years (57 to 71). So by 2066 we’ll have seen 3 more generations emerge after Gen Alpha and we can be sure that these individuals will be shaped in completely different times.

ABOUT ELIANE MILES

Eliane Miles is a social researcher, trends analyst and Director of Research at the internationally recognised McCrindle. As a data analyst she understands the power of big data to inform strategic direction. Managing research across multiple sectors and locations, she is well positioned to understand the mega trends transforming the workplace, household and consumer landscapes. Her expertise is in telling the story embedded in the data and communicating the insights in visual and practical ways.

From the key demographic transformations such as population growth and the ageing workforce to social trends such as changing household structures and emerging lifestyle expectations, from generational change to the impact of technology, Eliane delivers research based presentations dealing with the big global and national trends.

With academic qualifications in community engagement and postgraduate studies in international development and global health, Eliane brings robust, research-based content to her engaging presentations and consulting. As a social researcher, she has been interviewed on these topics on prominent television programs such as National Nine News and Today, as well as on radio and in online media.

DOWNLOAD ELIANE'S SPEAKERS PACK HERE

To have Eliane present at your next event, please feel free to get in touch via email to ashley@mccrindle.com.au or call through to 02 8824 3422

McCrindle in the Media

Wednesday, February 10, 2016

As Australia’s leading social researchers, the senior research team at McCrindle are actively involved in media commentary. From demographic analysis and future forecasts, to communication of key research findings and the identification of social trends, at McCrindle we are passionate about communicating insights in clear, accessible and useable ways.

Here are some of the most recent media pieces our research and team have been cited in:


Millenials found to be far more likely to quit work than other generations

“Millenials are a multi-career generation, moving from one job to another and from one job to further study or an overseas job. Mobility defines them,” he said.
“They’re a more educated cohort, they’re more tech-resourced. Even when they’re happy in a job they’re passive job hunters because they’re so well networked. People are approaching them on LinkedIn and they want to be future proofed.”
“They are looking for belonging and leading and shaping things. They want to be successful so if employers are empowering and involving them they will stay longer. A pay increase is a short-term fix but in the long term it’s all about engagement.”
CLICK HERE TO READ THE ARTICLE


Buyers Swap 'Traditional Aussie Dream' For High Density Apartments

McCrinde Research social demographer Mark McCrindle concedes many foreign buyers are getting into the market, but said the lift in demand was also due to more Australian singles, couples and families opting for apartments.

Australia's booming population was underpinning the shift, he said, by pushing up demand for property of which apartments were an affordable type. "In less than 2 weeks we hit the 24 million mark and that's an increase of a million people in just around three years, so it's pretty significant growth," he told The Huffington Post Australia.


Inside Sydney’s homes of the future: A city of cities as homes get smaller and taller

McCrinde Research social demographer Mark McCrindle says Sydney's residential landscape will be forced to change to cope with the population growth, with multi-use residential developments the way of the future and a move away from CBD workplaces.

“We’re essentially going to be a city of cities, with not everyone working in the CBD,” Mark explains. “People will work in the suburbs, in business parks, and we will have second, third and fourth CBD areas where you work, live and play all within the locale.”




Why money is a big issue for Australian retirees in 2016

Social researcher Mark McCrindle said financial instability was an enemy of retirees. After the GFC a lot of people had to change their retirement plans and expectations because so much was wiped off,” he said.

Falling house prices in several states were adding uncertainty to retirees looking to downsize, Mr McCrindle said, while there were social impacts caused by children failing to leave the nest. “Retirees can’t quite make their own independent decisions because they still have adult children living at home.”

CLICK HERE TO READ THE ARTICLE



According to Optus’ Renter of the Future report out today, three out of ten renting households consider themselves as “choice renters” who are not buying into the great Australian property dream. And when it comes to choice renters, they are three times more likely to be tech savvy.
The report, which was conducted by McCrindle Research shows that 2016 will see a new generation of tech-savvy renters who favour a lifestyle fuelled by freedom, flexibility and choice.
“We wanted to understand the renter and find out who they are. Demographically they’re got punch, geographically they’re got punch and as we’ve found from this technologically they’re amongst the earliest adopters,” said Mark McCrindle, social demographer.




Today's trends are coming at us faster than ever and have a life cycle that is shorter than we've ever seen before. Trends are increasingly global -- and with that, they're bigger, better, and faster.

From a generation who can track, monitor, record and analyse their every moment, to work that is increasingly being done in non-traditional places, here are some trends to watch in 2016.


CLICK HERE TO READ THE ARTICLE

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