The ”Baby Boomers” are the generation of our population born between 1946 and 1964 and they have been hot topic in the real estate industry for the last few years because between 2011 and 2030 they will turn 65 and most of them will be leaving the workforce.
This will certainly have an effect on our property market given that they make up around 20% of our total population; although I’m not convinced it will impact our markets as much as other industry experts might have us believe. The sea/tree change days of the 80’sand 90’s are gone, well not gone, but the percentage of retirees relocating to coastal and rural areas has dramatically decreased, with many choosing to remain in the areas they have lived in for decades or choosing a city lifestyle to be close to amenities and entertainment. Demand for property over this coming period will be spread across different location and styles.
As the Baby Boomer retire, the majority will sell their largest and most valuable asset – the family home – in order to free up cash.
Let’s examine our Capital City dwellers; they will have 3 options:
Some will sell their home and purchase a new property in coastal or rural/regional area in order to live a more affordable and relaxed lifestyle. Real estate and general cost of living is far lower in rural/regional areas and because property investment or wealth creation wasn’t ingrained in this generation, many will retire and live a very modest lifestyle. It is hard to see how any one market will be noticeably affected by our relocaters as there are so many regional, rural and coastal areas our retirees will have to choose from.
Some will sell the family home (creating more supply of large homes in most cases on larger blocks of land) and purchase a smaller property in the same suburb or slightly closer to the CBD. This will create purchase demand for apartment and townhouse living in the inner and middle rings predominantly (in turn pushing property values up) and will mean that residents will continue to enjoy the shopping strips, amenities and social networks they are familiar with.
Some will sell the family home and choose to rent while they decide where they want to settle and what their travel plans will be. This will create rental demand predominantly for apartments and townhouses in the CBD, inner ring and middle ring. Properties with superior design and size, close to transport and amenities will rent well.
WHAT DOES THIS MEAN FOR INVESTORS?
At Property Way we are all about reducing risk so we are not about to take a punt on which suburbs or regional towns we think retirees will flock too. That is fraught with disaster.
However, we do believe there is excellent opportunity in the inner ring for apartments in small complexes, walking distance to amenities, preferably ground floor or with large outdoor spaces and low body corporate fees; and in the middle ring suburbs for townhouses that are over 5 years old (or larger than average), in small subdivisions and high quality fixtures acheter viagra and within 1km of amenities and transport. These will appeal to retirees from both a sale and rental perspective and will bullet proof your investment portfolio as they appeal not only to this market of buyers but also to young families.