Currently, there are 2.3 million Australians aged between 53 and 68 and as they are heading into retirement, they are currently driving up the prices of the top end real estate in Melbourne while redefining new trends in the real estate market.
There are numerous instances where the reserve prices of top end Melbourne real estate are tending towards $1 million due to the impact of aspirational Baby Boomer buyers who are shopping for an ideal and luxurious living environment. Baby Boomers are not just buying properties for the sake of it; they are looking for the convenient living spaces that they have always aspired for and now they are able to afford.
Their influence in the Melbourne real estate market is a lot more nuanced and at the same time pervasive. They are just not zoning off a particular market with their deep pockets. Their investment choices are multi-layered. For example, some of them may be active in the mid-priced range or entry-level residential property market because they are helping their kids buy homes or they are simply snapping up investment properties for the right price. On the other end of the spectrum, they are snapping top end luxury real estate.
Traditionally, retirees have always downsized their properties and purchased smaller properties in small retiree “outposts” where they are able to enjoy a quieter frugal lifestyle. However, today’s Aussie Baby Boomers aren’t your ordinary retirees. As an investor or realtor, it is important to delve deeper and understand the nuanced choices, tastes and preferences of the 21st century Baby Boomer.
What kind of property investments are likely to appeal to them in Melbourne? Currently, many of them are opting for the tightly held residential properties in Melbourne inner city. They are also buying big in the northern suburbs. These are currently the places where the money is.
Things to Keep Mind About the Current Baby Boomer Property Investment Trends
The Aussie Baby Boomer is literally setting the trends when it comes to property investments. As we have noted, they are not reclining to the traditional retirement enclaves. Instead, they are going for the so called aspirational purchases and snapping up dream homes and investment properties.
If you are a property investor, it is imperative that you understand the Baby Boomer buying behavior so that you can ride the wave of real estate boom amongst this deeply pocketed demographic.
Many Baby Boomers are riding the real estate wave themselves, living in some of the best homes in Australia and are generally cashed-up and with a great portfolio of real estate amassed over the years in addition to their superannuation nest egg.
Even when they downsize, the Baby Boomers are opting for more innovative downsized properties instead of the traditional retirement villages. A common trend is the redevelopment of existing properties to make them suitable for generational living. Alternatively, they are likely to buy into much smaller single-story properties where they can maintain their lifestyle along with a sense of independence.
Baby Boomers are also increasingly moving closer to the cities as opposed to the retirement enclaves like coastal Queensland. This has put them into direct competition with many cash-strapped first-time buyers.
These are some of the main trends in Baby Boomer real estate investment. Location will be an important factor. The old retirement villages are no longer in vogue and inner city options are growing increasingly popular. The property should be low-rise, nicer and trendy and not necessarily big. Get these right and you can begin riding the Baby Boomer property wave.