Australian downsizers are going to play a crucial part in the property market this year, according to the Real Estate Buyers Agents Association (REBAA).
Cashed-up downsizers will take advantage of the softer lending conditions, the low interest-rate environment, and the strong house-price growth as they sell their family homes and move either into apartments or in regional areas, said Cate Bakos, president at REBAA.
“There is no doubt that wealthy older buyers — downsizers, baby boomers, empty nesters, retirees — we can term them with a few descriptors, will be a powerful force in the property market in 2020 and one that won’t be going away soon,” she said.
In fact, figures from the Australian Bureau of Statistics show that older Australians have an increasing share of the nation’s wealth. Bakos said this could be due to the recent house-price boom that inflated the values of existing homes.
Furthermore, a study from Grattan Institute showed that households in the 65-74 age group in 2015 were, on average, wealthier by as much as $480,000 than households in the same age group 12 years ago.
“It’s evident that many of our capital city inner-ring property auction losses are at the hands of a more mature generation and with potential for further low interests, softer lending conditions, and low stock levels, it could be ‘the perfect storm’ for downsizers this year,” Bakos said.