New leases of life are key to housing

I HAVE a theory about the demand for housing and it has nothing to do with population or household formation.

Illustration: Michael Perkins

I HAVE a theory about the demand for housing and it has nothing to do with population or household formation.

Rather it has everything to do with relationships: the type of accommodation we want reflects where we are in the relationship universe. Consider how this works.

In the modern household, young adults remain in the family home from 18 to 25 because the cost of housing is so exorbitant that they cannot move out. Although I suspect the real reason is that this arrangement increases Generation Y's disposable spending. If mum and dad pick up boring bills like mortgage, utilities and insurance, then there's more left to spend on clothes, travel and lifestyle.

And this is an especially cool arrangement if boyfriends and girlfriends can stay over in the bedroom. No wonder this lot are known as KIPPERS: Kids in Parent's Pockets Eroding Retirement Savings. Last decade's Kipper Kaboom underpinned demand for bigger houses with bigger bedrooms (kids need queen-sized beds) and second bathrooms.

By the late 20s, kippers transmogrify into childless yuppies who migrate from the 'burbs in towards the city centre, where they settle in a new space known as apartmentia. At this stage of life, what singles and couples desperately need is an apartment with granite bench-tops, European appliances and stainless steel splashbacks. (Can you believe that some deprived people have Laminex splashbacks?)

Towards the end of the 20s, things start to hot up in the search for a more permanent partner. After a decade of try-outs, it's time to settle down and make a final selection just before 30. This partner is different to previous models who were, shall we say, selected for a good time not a long time.

At some point in the early 30s, that inner-city apartment starts to look squishy. One kid you can manage. Why, you can pretend you're living on the Upper East Side. (Don't embarrass yourself by asking where's that.) But by the second child and the onset of the mid-30s it's time to reassess the 'burbs.

Perhaps suburbia is no longer the wasteland of your youth. Perhaps there's a sort of cache in a "character" suburb. Everyone thinks their suburb is special and that "it's really changing, you know". And so for the young family it's off to a three-bedroom villa in suburbia and the cycle begins anew.

Although with modern relationships there's often another chapter. The most common age at which couples divorce is late-30s to early-40s, a time of heightened financial pressure, the advent of two-or-more kids, and frustrated ambition in the workplace. It's a perfect storm for a relationship bust-up. Time to break free.

Typically, dad heads back to the inner city and forms another relationship within a year. Mum stays in the family home while property is being settled. Suddenly she's in the market for a new relationship -- and house -- and her terms of engagement have changed. "Hotness" is less important. What women now want is a soul-mate. Someone who, you know, really really understands me.

A generation ago, relationships may have been miserable but they were nevertheless stable: marry, have kids and die in the same suburban house. Today, relationships are more like a lease that either party may or may not choose to renew. With each change of lease, and even renewal, the occupants of the relationship review their housing and partner needs.

If you want to stay ahead of the curve in terms of housing demand, forget traditional demographics and look at the way relationships are changing.

Bernard Salt is a KPMG Partner; [e-mail]; www.twitter.com/bernardsalt