You can usually find this somewhat opinionated generation appearing daily on our TV or radio networks lecturing us with their infinite wisdom of how things were done in their day. As much as this is a generalisation, the Baby Boomer cohort are really our much beloved parents or grandparents. However, if you ask the government they are defined as those born between 1946 and 1965. In 2011, the first of the Baby Boomers (born in 1946) reached the official preservation age of 65 and began to retire.
It’s interesting to note that if there are four people sitting near you it’s most likely one of them belong to the Baby Boomer cohort, it may even be you!
This greying, freckly demographic will have untold effects on the Australian economy in the future as the ABS predicts approximately 4,800 will retire each week in 2013, with this number increasing to a peak of 6,000 in 2028. The Baby Boomer demographic has been one of the key drivers of property price movements since the 1970s and will yet again drive price movements in the future. Many baby boomers have accumulated their wealth in property as they have only had a short time to accumulate their super balances since its inception in 1992.
Most Baby Boomers were full of confidence prior to the GFC, planning to retire somewhere on the coast (often the Gold Coast) and fly down every other week to visit the family. That dream has gone up in smoke for many Baby Boomers. Large losses on the share market and property price falls in excess of 30% in those popular retirement areas have changed the plans of many. Research now shows that Baby Boomers prefer to not move away from their families but be close to have the option of seeing grandchildren and their own children often. Baby Boomers are also moving away from large houses and downsizing and purchasing properties that require little external maintenance, making townhouses and units a popular choice. Another interesting fact is that demand to live close to services such as hospitals, shops and clubs is high on a Baby Boomer’s list for an area they want to live in. Unlike previous generations, the current Baby Boomer generation is much more social and active, preferring to live around the younger generations. Now it is not unusual to have a few Baby Boomer couples living in your apartment complex in the inner city areas.
An American research paper found people become net sellers of real estate after the age of 65, while net buying of real estate is most pronounced between the ages of 25 and 35 – when young people typically leave home and form new households. So now might be a good time to call upon our wisdom filled elders and see what their plans are for retirement, it might be a good indicator of the areas in which this generation will buy properties.