Property researcher Colliers International says Generation Y is tipped to inspire great change across residential landscapes and be the most influential since the baby boomers.
It calculates there are over 5.5 million Australians that are considered Gen Y - people born in the 1980s and 1990s - which is 200,000 more than baby boomers and 700,000 more than Generation X, or those born in the mid 1960s to the late 1970s.
"The emergence of Generation Y homebuyers is a demographic shift developers can't ignore," Colliers residential research director Jonathan Rivera says.
"We will see a greater shift of Gen Y toward home ownership in 2011 and 2012."
And developers must do their homework if they want to tap into the $48 billion spending power of the Gen Y population.
According to Colliers, Gen Y wants compact urban developments in the middle-ring suburbs, five to 15km from the CBD, with strong social and amenity networks.
"Our research has shown that Gen Y are very accepting of density and the majority believe they do not have to move to the suburbs once they have kids," Rivera said.
"They are interested in close-knit neighbourhoods. They like to belong or identify themselves in relation to where they live."
Still, Rivera said a large proportion of Gen Y will still be forced to rent, providing opportunities for investors.
"It's a necessity for both developers and investors to understand Gen Y characteristics, behaviour and needs to cash in on the Gen Y wave in the coming years," he said.
