The significance of the baby boomers in the Australian property investment market is underlined by new figures released by DEPPRO.
According to Paul Bennion, Managing Director of DEPPRO, some 50% or around half of all property depreciation reports prepared by DEPPRO are for baby boomer investors.
“Baby boomers have been very active in all the markets now serviced by DEPPRO throughout Australia,” Mr Bennion said.
“A growing number of baby boomers in Australia now view property investment as a low risk way of building wealth for their retirement compared to the stock market or even superannuation,” he said.
“Many baby boomers have been attracted to buying investment properties because they can leverage the large amounts of equity they have in their owner occupier homes to organise home loans in excess of $1 million to purchase several investment properties.
“For many baby boomers, property investment is now a financial imperative because a recent survey indicated that less than 10% of all baby boomers have more than $100,000 in superannuation.
“This financial imperative is further underlined with the year of baby boomers (people born between 1946 to 1965) turning 60 years of age during 2006,” Mr Bennion said.
“DEPPRO is finding that baby boomers are now particularly active in the ‘red hot’ property markets of the Northern Territory and Western Australia,” he said.
“For example, more than 65% of depreciation reports for property investors in WA which are prepared by DEPPRO are for baby boomer investors.
“Baby boomer property investors have been very active in Western Australia because they are the most informed about property investment opportunities and also because of the very high confidence in the future of the local real estate market,” Mr Bennion said.
“Underlying demographic factors will result in more baby boomers investing in real estate to fund their retirement in Western Australia with ABS figures showing that while people aged 60 years and over made up around one in seven persons in 2001, this figure is projected to increase to around one in four in 2031,” he said.
“The high rate of activity by baby boomer investors in the WA property market is underlined by the fact that even though they account for around 30% of the entire population, they are now accounting for more than 50% of all property sales in some areas of the real estate market.
“The large amount of wealth that baby boomers have in their owner occupier homes in Western Australia was highlighted by an ABS survey in 2001 which showed that of older baby boomers households who owned their dwelling, 22% owned dwellings worth $300,000 or more. This was at a time when the median house price in Perth was just $171,800.
