Would you believe me if I told you there’s a huge number of small-scale opportunities for first-time property developers that are ripe for the picking?
We like to call it the ‘missing middle’ but maybe you’ve heard the terms ‘in-betweeners’ or ‘infill development’ to express the same concept.
American architect Daniel Parolek coined the term ‘the missing middle’ in 2010 to describe the lack of medium density housing stock in the US dating back to the 1940s.
Aussie home buyers face a similar dilemma: there are stacks of family homes and a tonne of apartments up for grabs but not enough duplexes, triplexes, townhomes and terraces.
So why the shortage?
First up we have an ageing population. The baby boomers who lived the great Australian dream of the quarter acre block have got to the point where that big backyard has actually become a bit of a burden. These folks are getting to the point where they're wanting to go into retirement and maybe they're struggling a bit with funding that retirement. So there's a very large temptation to cash in those big backyards and move into something that will deliver a low maintenance lifestyle.
Some of these grey nomads want to jump in a motorhome and do a lap of Australia, and when they come home, they want to return to a property that’s pretty much in the same condition as they left it.
Add to that a younger generation that's not so in love with the idea of looking after a big backyard. Of course there are some exceptions, but there’s also a growing cafe latte set who don’t want to spend their weekends behind a lawn mower and a leaf blower.
Now throw in the final element: housing affordability. We've got property prices, especially in the capital cities, that are truly out of reach for so many buyers.
All these elements mean we’ve come to the point where more and more people are leaning towards smaller homes, out of both necessity and for lifestyle reasons.
So what kinds of dwellings fall under the ‘missing middle’ umbrella?
We’re talking about everything from granny flats, duplexes and triplexes to villas, terraces, townhouses, multiplexes and mixed use developments (sometimes known as shop-tops).
What all these dwelling types have in common is they’re not big, freestanding family houses and they’re not towering blocks of flats.
The good news for us is that the big boys are busy with their sprawling land subdivisions, and they’re busy doing their huge blocks of apartments.
They’re too busy – and too big – to compete in this small-scale, infill development space.
That means tens of thousands of opportunities for us small-scale developers: nice, sweet, easy-to-do developments. And believe it or not folks, there aren’t enough of us either, so we won’t be beating each other up to buy land deals.
It’s a massive hole in the market. And a massive opportunity to cash in.
Thanks to new births and net migration, there’s around 400,000 people per year needing a new home and most of them are headed for our four biggest cities: Sydney, Brisbane, Melbourne and Perth.
According to the Australian Bureau of Statistics, we've got about 2.5 people per home, so that means we’re going to need around 160,000 new dwellings every year.
Urban sprawl isn’t an option because people are getting further and further away from where they actually work.
In a recent paper on housing affordability, the Grattan Institute reported not enough medium-density housing had been built in the established suburbs of our major cities close to most new jobs and existing infrastructure.
While housing stock in our cities has moved “a little closer to what people say they would prefer” over the past 30 years, the Grattan Institute found the supply of medium density housing still fell well short of what people want.
People want to live close to their jobs. They want convenience, affordability and lifestyle.
They’re looking for the ‘missing middle’.
What does that mean for small-scale developers like us?
We can fill in the gaps, give buyers what they want and make good returns in the process.
We like to call it the ‘missing middle’ but maybe you’ve heard the terms ‘in-betweeners’ or ‘infill development’ to express the same concept.
American architect Daniel Parolek coined the term ‘the missing middle’ in 2010 to describe the lack of medium density housing stock in the US dating back to the 1940s.
Aussie home buyers face a similar dilemma: there are stacks of family homes and a tonne of apartments up for grabs but not enough duplexes, triplexes, townhomes and terraces.
So why the shortage?
First up we have an ageing population. The baby boomers who lived the great Australian dream of the quarter acre block have got to the point where that big backyard has actually become a bit of a burden. These folks are getting to the point where they're wanting to go into retirement and maybe they're struggling a bit with funding that retirement. So there's a very large temptation to cash in those big backyards and move into something that will deliver a low maintenance lifestyle.
Some of these grey nomads want to jump in a motorhome and do a lap of Australia, and when they come home, they want to return to a property that’s pretty much in the same condition as they left it.
Add to that a younger generation that's not so in love with the idea of looking after a big backyard. Of course there are some exceptions, but there’s also a growing cafe latte set who don’t want to spend their weekends behind a lawn mower and a leaf blower.
Now throw in the final element: housing affordability. We've got property prices, especially in the capital cities, that are truly out of reach for so many buyers.
All these elements mean we’ve come to the point where more and more people are leaning towards smaller homes, out of both necessity and for lifestyle reasons.
So what kinds of dwellings fall under the ‘missing middle’ umbrella?
We’re talking about everything from granny flats, duplexes and triplexes to villas, terraces, townhouses, multiplexes and mixed use developments (sometimes known as shop-tops).
What all these dwelling types have in common is they’re not big, freestanding family houses and they’re not towering blocks of flats.
The good news for us is that the big boys are busy with their sprawling land subdivisions, and they’re busy doing their huge blocks of apartments.
They’re too busy – and too big – to compete in this small-scale, infill development space.
That means tens of thousands of opportunities for us small-scale developers: nice, sweet, easy-to-do developments. And believe it or not folks, there aren’t enough of us either, so we won’t be beating each other up to buy land deals.
It’s a massive hole in the market. And a massive opportunity to cash in.Thanks to new births and net migration, there’s around 400,000 people per year needing a new home and most of them are headed for our four biggest cities: Sydney, Brisbane, Melbourne and Perth.
According to the Australian Bureau of Statistics, we've got about 2.5 people per home, so that means we’re going to need around 160,000 new dwellings every year.
Urban sprawl isn’t an option because people are getting further and further away from where they actually work.
In a recent paper on housing affordability, the Grattan Institute reported not enough medium-density housing had been built in the established suburbs of our major cities close to most new jobs and existing infrastructure.
While housing stock in our cities has moved “a little closer to what people say they would prefer” over the past 30 years, the Grattan Institute found the supply of medium density housing still fell well short of what people want.
People want to live close to their jobs. They want convenience, affordability and lifestyle.
They’re looking for the ‘missing middle’.
What does that mean for small-scale developers like us?
We can fill in the gaps, give buyers what they want and make good returns in the process.
