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.
Denne historien er fra April 2021-utgaven av Money Magazine Australia.
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Denne historien er fra April 2021-utgaven av Money Magazine Australia.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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