Changing lives and new needs

As Australians change the way they live their lives the demographic landscape is shifting.

As Australians change the way they live their lives the demographic landscape is shifting, and new customer segments are emerging at scale. Let’s explore three of these emerging segments that real estate professionals should be particularly interested in.

The first segment can be ­described as “single wealthy ­females”. Why does this segment have such big growth potential? Back in the day when women were largely excluded from the labour force, the only way to improve one’s social standing was to marry into a higher-income bracket. Over the past four decades, women entered the Australian ­labour force in huge numbers.

Today, girls and women outperform their male counterparts in primary, secondary and tertiary education. Australia is shifting more towards a knowledge economy, in which education and training are the most sought-after characteristics in workers. Slowly but surely, prejudices against women in the labour force are dying out, especially among the younger generations.

This will lead to an increasing number of highly trained and well-remunerated women. Many of these women will have highly successful careers. While the world of work is becoming more equitable and fairer, women don’t seem to have changed their partnering ­behaviour. This is sometimes ­referred to as the upwards social mobility of women. Women tend to look for a male partner of at least equal educational standard. Women don’t marry “down”, they marry “up”.

This made sense in a world where they couldn’t work and earn an income for themselves.

Consequently, it is these highly trained, well-paid women at the top of organisations that can’t find a partner meeting their standards. If you hear a well-educated, successful woman over 37 (that’s the age when we see more single ­females than single men) complain that there are just no good men out there, she is, demographically speaking, correct. As it is unlikely that these highly trained women will lower their standards, many will stay unpartnered and focus on their careers in the knowledge economy. Their jobs will be clustered in the central business districts of our largest cities and they will seek out housing near their jobs in safe lifestyle suburbs. They will look for stylish, safe, well-designed housing.

The second market segment comes into existence through much the same forces that created the single wealthy females. We are talking about young families where the mother is the primary income earner and the father stays at home, or works part-time, to look after the kids.

Many young lovers meet at university and partner up before it is quite clear how much each partner will earn throughout their ­career. With women increasingly entering high-paying jobs (even though we are far from a gender balance in the top-paying jobs, as the table shows) we will see more couples where the woman out-earns her male partner. This puts a price on the male ego.

Most couples will make shrewd financial decisions regarding who will stay at home to look after the kids. After all, there is a mortgage to pay and raising children isn’t cheap either. Such couples won’t be the norm, but they are a growing market segment. With a male primary carer spending more time at home, we can fairly assume that home decorating and organising preferences will become an increasingly male domain. Men upgrade from paying for home design and decorations to being more actively involved in such matters. Marketers and agents must be aware of such family structures when interacting with clients.

The third emerging market segment is the working poor. This isn’t a happy story, but a reason to be concerned. The working poor will be increasingly made up of gig-economy workers. These workers are paid “by the gig” in some way and don’t have a fixed income or obvious progressive ­career path.

The income profile of many gig economy workers looks much like the one of taxi drivers in the chart. No matter if a taxi driver has one year of experience or 40, the income stays the same. When you essentially get paid by the kilometre, the only way to make more money (in a world of rising costs of living, it’s very likely that is needed) is to work yourself to death.

Many gig workers will face this challenge.

Between the last two censuses we created essentially no net new middle-skilled jobs (tradies, construction workers and manufacturing). However, we created tons of highly skilled knowledge jobs (that’s where the single wealthy females and the young families with male primary carers will be employed) and tons of new low-paid jobs, often gig-economy jobs. If gig workers only hold these jobs as an income source while studying or as a side hustle, all is well.

However, I doubt that it will be possible to secure a mortgage, ­especially considering tightened regulations in the aftermath of the royal commission, if you are a gig worker. This means we exclude a growing number of people from the opportunity to live the Australian dream and own a home. This means demand for hyper-affordable (likely government-subsidised) rental accommodation will increase. Such housing is unlikely to be built in the same neighbourhoods sought by the single wealthy females and knowledge-worker families. The current workforce trends suggest a further income-based segregation of our capital cities.

The growing segment of gig workers is at the risk of being overlooked by politicians as many aren’t Australian citizens and can’t vote. Once politics catches on to the blight of the low-income earners, we will see renters’ rights being strengthened. Further, I can imagine scenarios where developers will be required to make a growing share of their stock available for social housing in an ­attempt to spread low-income earners over the whole city rather than forcing them to live in the cheap outskirts.

Simon Kuestenmacher is the director of research at The Demographics Group.

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