Right now, the baby boomer effect is likely to push up property prices, keeping the market buoyant. Baby boomers – 76 million of them were born around the world between 1946 and 1964 in the population boom after World War II – are commonly regarded as the wealthiest group with the most disposable income.
Many Australian boomers own family homes and have spent years investing, be it in property, shares or government bonds.
Despite this long-term theme of baby boomer home ownership, most real estate commentary is focused on millennials getting into the market and government incentives to help increase ownership.
But with the ageing of the baby boomer generation leading to the sale of many large family homes, we will start to see an increase in house and unit prices across Australia, especially for villa-style, smaller dwellings. This will encourage more investment in the market from both domestic and international investors, which will chew up the supply.
Baby boomers are back in the property market for two main reasons:
1. Investment yields. Falling interest rates are a big problem. Self-funded retirees have generally preferred term deposits and shares for their income. However, low rates over a long period of time are forcing many to buy investment properties instead.
2. Home retirement. The federal government is promoting home care, although the system has its share of problems, such as long waiting lists. Due to a shortage of adequate retirement and nursing home facilities, more boomers might retire in their existing properties with government support, limiting the housing supply.
These influences will place upward pressure on house prices over the next 10 to 15 years.
Esta historia es de la edición April 2021 de Money Magazine Australia.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición April 2021 de Money Magazine Australia.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.
