Baby Boomers Set to Have Major Impact on Housing Industry in Next Few Years
Announcement posted by Origin Projects - Land & New Homes in WA 14 Apr 2014
Developer of house and land packages in Perth suburbs reveals how retiring baby boomers are projected to affect the housing market.
Perth, WA, 14 April 2014 - The exploits of the baby boomer generation, usually defined as those born between 1949 and 1961, are well-documented. But for the Australian housing market, they may be saving their best act for last.
Roughly 4 million Australians were born in the baby boomer generation. By 2026, all of them will have reached retirement age. A recent report in IBIS World expanded the group to include those between the ages of 45 and 64. The IBIS World report drew some conclusions that spell good news for the housing market.
Among those in WA between 45 and 54, an estimated 76% are homeowners. Among the 55 to 64 demographic, an estimated 81% are homeowners. It is projected that a large number of baby boomers will be changing their lifestyles soon after retirement. Some are projected to become “downsizers” and move into less spacious homes. Some are projected to seek lifestyle locations or move to “sea change” communities.
Whatever choice this sizeable portion of the population makes, the movement will have a profound effect on the housing market. The market will become busier and more competitive, meaning that prices will inevitably rise due to the law of supply and demand.
Michael Yardney, who is the Managing Director of Metropole Property Strategists, projects that baby boomers who live in the inner city and middle ring suburbs will want to move to “lifestyle locations” on the fringes of the suburbs. Although it was predicted by many that this possible migration could produce too many vacancies and cause what was termed by some a “market bust”, there is no evidence that any market collapse is imminent.
At this point, it appears more likely that any migration away from the inner city and middle ring will be slow because most retirees will stay in their current locations for a few years after they retire. This should provide ample time for immigrants and young Australians just entering the housing market to replace baby boomers as they move away from the inner city and middle ring.
According to the report, it is most likely that the homes of retiring and relocating baby boomers will be bought by developers, who will develop them with increased density, turning larger blocks into apartment buildings or duplexes. Many middle ring suburbs are already allowing for more density, while others plan to do so in the future.
Developments for downsizers on the outskirts of the Perth market are expected to thrive. Recently, an apartment development in an outer suburb watched downsizers purchase 70% of available units.
Madeleine McErlain, Marketing Manager of 4Land Property Group, believes that the report is “on the money” and she has seen some movement toward downsizing already. According to Ms McErlain, “We have a development in Erskine, adjacent to Mandurah, called Natures Walk. We designed it for downsizers, using smaller blocks and smaller homes with ultra-efficient designs. The development has been extremely successful; every stage sells out shortly after we make properties available.”
Ms McErlain concluded, “A healthy market brings competition, which drives up demand and prices. We strongly recommend buying now, before prices rise.”
4Land Property Group develops house and land packages on master planned land estates in Perth suburbs and in Geraldton. They specialise in affordable homes in suburbs poised for long term capital growth. For more information, please call (08) 9301 4445 or visit their website: http://www.4land.com.au/.
Roughly 4 million Australians were born in the baby boomer generation. By 2026, all of them will have reached retirement age. A recent report in IBIS World expanded the group to include those between the ages of 45 and 64. The IBIS World report drew some conclusions that spell good news for the housing market.
Among those in WA between 45 and 54, an estimated 76% are homeowners. Among the 55 to 64 demographic, an estimated 81% are homeowners. It is projected that a large number of baby boomers will be changing their lifestyles soon after retirement. Some are projected to become “downsizers” and move into less spacious homes. Some are projected to seek lifestyle locations or move to “sea change” communities.
Whatever choice this sizeable portion of the population makes, the movement will have a profound effect on the housing market. The market will become busier and more competitive, meaning that prices will inevitably rise due to the law of supply and demand.
Michael Yardney, who is the Managing Director of Metropole Property Strategists, projects that baby boomers who live in the inner city and middle ring suburbs will want to move to “lifestyle locations” on the fringes of the suburbs. Although it was predicted by many that this possible migration could produce too many vacancies and cause what was termed by some a “market bust”, there is no evidence that any market collapse is imminent.
At this point, it appears more likely that any migration away from the inner city and middle ring will be slow because most retirees will stay in their current locations for a few years after they retire. This should provide ample time for immigrants and young Australians just entering the housing market to replace baby boomers as they move away from the inner city and middle ring.
According to the report, it is most likely that the homes of retiring and relocating baby boomers will be bought by developers, who will develop them with increased density, turning larger blocks into apartment buildings or duplexes. Many middle ring suburbs are already allowing for more density, while others plan to do so in the future.
Developments for downsizers on the outskirts of the Perth market are expected to thrive. Recently, an apartment development in an outer suburb watched downsizers purchase 70% of available units.
Madeleine McErlain, Marketing Manager of 4Land Property Group, believes that the report is “on the money” and she has seen some movement toward downsizing already. According to Ms McErlain, “We have a development in Erskine, adjacent to Mandurah, called Natures Walk. We designed it for downsizers, using smaller blocks and smaller homes with ultra-efficient designs. The development has been extremely successful; every stage sells out shortly after we make properties available.”
Ms McErlain concluded, “A healthy market brings competition, which drives up demand and prices. We strongly recommend buying now, before prices rise.”
4Land Property Group develops house and land packages on master planned land estates in Perth suburbs and in Geraldton. They specialise in affordable homes in suburbs poised for long term capital growth. For more information, please call (08) 9301 4445 or visit their website: http://www.4land.com.au/.