“Let’s face it, we don’t have expensive housing in Australia, we have expensive land. The average cost of residential land overtook the median cost of constructing a dwelling, across all Australian capitals, about five years ago. The difference between the two is now considerable and growing.” Michael Matusik.
We are finding that more and more people are considering property development for the purposes of bringing families together in a completely different way to the traditional housing models of previous generations. We shall explore some scenario’s in Part 1 of this two part series.
In part, this shift is a response to land costs and the inability of adult children to purchase property in the neighbourhood in which they grew up. There seems to be a new way of addressing the issues confronting both older and younger generations using subdivision as a way to shift wealth.
Most commonly, these arrangements are around the gift of land from one generation to the next. In simple terms, this means mum and dad agree to subdivide the land on which the family home sits so that their children can build a home. However, there are many different ways this can be done, and the benefits can be great.
Scenario One:
Let’s say a family grows up in a middle ring suburb on an “average” 700m2 allotment with a traditional detached dwelling of three bedrooms and plenty of backyard to exercise the Victa lawnmower. Now mum and dad are older, maybe retired – or soon to be – the kids have gone to university and are now a little bit over the share house thing and are looking to settle down. They would like to settle back into the old neighbourhood but the cost of land is prohibitive.
In this scenario we are finding that the solution may be the subdivision of the family home into two or more allotments. In this way, mum and dad can downsize without leaving the area they know and love, and can give the children a ‘leg up’ on the property ladder.
Scenario Two:
Recently we took on a project that essentially covers three generations and is all due to a family legacy. The project brief was to retain and modify the existing dwelling and build two additional dwellings on a large (approximately 900m2) suburban allotment. In this case the original house was left to the children after the parents passed away.
The house was sound and had sentimental value so it was decided it should be updated and retained. The two siblings to whom the house was left decided to also introduce a third generation (an adult child of one of the siblings) to also be part of their project. So, that which started as a family home on a generous suburban allotment, will now house three families.
Conclusion
There is a shift in traditional housing models of previous generations, towards intergenerational housing.
Land is expensive and we are currently seeing our towns and cities being re-shaped to suit new housing types.
Intergenerational housing is an opportunity for parents to give their children a ‘leg up’ on the property ladder.
In Part 2 of our Intergenerational Housing: Shifting Wealth, we will explore two more scenario’s.
CONSIDERING SHIFTING WEALTH?
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