Who lives in newly developed suburbs?

We often need to produce population forecasts for future growth areas where, at the last census, few people were living but, once construction starts, the population will grow significantly over a short space of time. There are many such places: Point Cook (in Melbourne’s outer south west), Rouse Hill (in Sydney’s outer north west) and a large number of suburbs in Perth, (Southern River, Success, Piara Waters, Byford etc). Given there is only a relatively small population (if any) living in such areas to start with, how do we know what type of people migrate into these areas as they start to develop?

The majority of new estates attract a very similar market, dominated by first time home buyers with young children (aged between 0-4 years), or couples intending to start a family. Given such areas have a very significant supply of housing, most age groups (except for the elderly) will have some increase in numbers, but overwhelmingly the pattern is dominated by family groups, where parents are aged between 20-34 years. This is the case even when an estate is being marketed at the second and third home buyer market. There are a number of reasons for this: 20-29 year olds are highly mobile owing to life event triggers such as marriage, moving out of home and starting a family and therefore figure significantly in the migration profiles for most areas; also these age groups are likely to be attracted to family type housing, looking to start a family. Finally, stamp duty savings and the comparatively lower costs involved in purchasing a new property (no renovations) are also big incentives.

Caroline Springs

A typical profile for a growth area is that for Caroline Springs, a recently developed suburb in the west of Melbourne. As can be seen from the migration profiles from the censuses from 1991-2006, the dominant group moving into new dwellings are 25-29 year olds, who are either couples without children (most likely intending to start a family) or parents with young children.

Source: ABS (Census – enumerated data)

Sanctuary Lakes

Even where an estate is marketed at higher income earners, young families remain a significant group: as can be seen from the historic migration profile for Sanctuary Lakes (an estate marketed towards the higher end of the market).

Source: ABS (Census – enumerated data)

This is a rare example where the dominant group is older than the norm, being 35-39 years, but 25-34 year olds still make up a very substantial group, and it is clear that many of these people are in households with young children; conversely, the profile drops off very quickly in older groups. Even where new estates are marketed in areas characterised as retirement areas (such as Mornington on the Mornington Peninsula), or “exclusive” golf course developments, the dominant group is still likely to be young families, the main variation being whether the parents are in their 20s or early 30s.

Why is this? Second and third home buyers form a smaller and more varied market. People in their 30s or 40s are less likely to move, and there are a number of factors mitigating against the purchase of a new house: for instance, established friends and networks, children in nearby schools and financial commitments. It is often more convenient for families with older children to extend an existing house than up sticks and move elsewhere. For most people, the trigger for moving will be a significant lifestyle change – such as the children leaving the family home, relocation for work or retirement. Furthermore, where they do move, people established within the property market have a number of options as to location and type of property. They already have a sizeable asset, so incentives such as stamp duty savings are less of a concern. Such individuals may be motivated by school catchment areas, local facilities or lifestyle choices (such as inner urban, rural or coastal locales). In contrast, younger buyers are more constrained and newly developed estates offer value, as well as the attraction of a community of people at a similar point in their lives with young children.

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