Influx of Baby Boomers Hitting Property Market

May 29th, 2013

Property analyst Catherine Cashmore is looking into the future of the property market and believes Australia must prepare for the influx of Baby Boomer retirees.

There is sure to be a mass movement of people into apartments as population density increases but real estate watchers are most concerned about the effects of Baby Boomers reaching retirement age. It’s a problem that the United States and the United Kingdom will be facing in the coming years too.

Census figures indicate that by 2051 the amount of people over 65 will have doubled since 2004 and the amount of people over 85 will have quadrupled. These are the Baby Boomers hitting retirement age and currently they own about half of Australia’s housing stock. So what happens when they downsize en masse?

Real estate developers are focusing on inner-city apartments, often with multiple stories, in Sydney and Melbourne but logic dictates that these may not be the sorts of dwellings retirees are interested in.

While many people are assuming that these retirees will start to occupy the inner-city apartments that are being developed, they may equally just want a smaller, cheaper house. In fact, a paper released by the Australian Housing and Urban Research Institute named ‘Downsizing amongst older Australians’, indicated that retirees are more likely to stay in the same suburb and prefer low density housing.

It seems that Australia’s ageing population is not simply going to fill the spaces in inner-city apartments. Few want the hassle of moving and downsizing their possessions for an apartment. Yet the suburbs lack the public transport and infrastructure that the elderly need, so a large percentage could simply end up staying put.

It seems that the Australian property sector will have to start thinking hard about how to deal with Australia’s changing population and housing needs, or else it will be dealing with a stagnating market.

Source: http://www.crikey.com.au/2013/04/16/bigger-is-still-better-but-boomer-downsizing-will-hit-property/