Housing set for shake-up in demographic tsunami.
Baby boomers are set to shake up the economy and residential property will be one of the key sectors to benefit.
With the last of the post-war generations turning 50, analyst IBIS World says the upcoming retirement of baby boomers will make a big impact over the next few years.
The property market, healthcare sector, travel industry, retirement housing and financial advice would be the sectors to get the biggest boost, IBIS World said.
In WA, baby boomers make up 21 per cent of population, according to the group’s research.
About 76 per cent in the 45 to 54 year old bracket Australia-wide own their own homes, and 81 per cent in the 55 to 64 year old bracket, according to the Australian Bureau of Statistics.
This demographic moving to better locations, downsizing or upgrading over the next few years will generate plenty of sales activity in the property market, IBIS World research analyst Ryan Kerin said.
Other property experts said the massive demographic shift would also change the face of inner-city and “middle-ring” suburbs and create more demand in lifestyle locations.
Hegney Property Group chief executive Gavin Hegney agreed immigration and population growth would maintain demand for boomer’s homes.
Mr Hegney said the bigger blocks in the middle-ring and inner-city suburbs would also be popular with developers.
“There won’t be tumbleweeds blowing down the streets of the baby boomers suburbs,” Mr Hegney said.
“We’ll see some areas upgraded with new, modern places on smaller blocks. There will be an increase in density in some areas. With more people, the local shops will be busier. That introduces more opportunities for local business, for example, local cafes. The areas will change from older-fashioned dwellings to more modern dwellings.”
Mr Hegney said while boomers’ homes might only be 40 years old, they would generally become highly sought-after for their land value.
He agreed smaller homes would be in demand, but said there was still some resistance to apartments from baby boomers.
“We have seen some baby boomers buy smaller apartments then bounce back into bigger properties when they realise they want a place for the grandkids to stay, or a backyard for them to play in,” he said.
Extract from article published in ‘The Sunday Times – Realestate’ dated 9 March 2014.