IT'S a typical weekend in suburban Australia and, as usual, many baby boomers are out in force, surveying the property landscape.
Some are looking at a lifestyle change, perhaps buying a smaller inner-city property after downsizing their larger family home, or even moving somewhere down the coast.
Others are checking out potential investment properties to build their wealth before retirement, which can provide a steady income stream as well as capital growth once they've actually left the full-time workforce.
The reasons are many and varied, but it is clear that a large number of Australians aged from their early 40s to late 50s - the so-called baby boomers - are investing in property as they prepare for retirement, or transition to retirement after age 55, thanks to the federal Government's recent superannuation changes.
Much of the evidence surrounding just how active baby boomers are in the property market is anecdotal, although a recent survey of more than 650 baby boomers by mortgage broker Mortgage Choice found that more than a third planned to buy an investment property in the next 12 months.
Almost half were aiming to fund their investment purchase through equity in the family home, with the remainder using borrowings or other means.
With the recent interest rate rise, and expectations of at least another this financial year, the portents point to tougher times ahead.
Mortgage Choice found that almost 90 per cent of its survey respondents rated their confidence in the residential property market as "moderate" to "very high".
The survey found that the type of investment properties being purchased are mixed, with definite favourites being residential free-standing dwellings (41 per cent), followed by residential units and apartments (35 per cent) and just over 9 per cent planning to invest in commercial property.
"Anecdotally, looking at the trends that might apply to baby boomers, one of the obvious ones is the activity up and down the coast of Australia and the fact that people are buying lifestyle properties," says Tony Brasier, president of the Real Estate Institute of Australia.
"When you look at places like the Richmond-Tweed region on the Queensland border, that's a very active segment and once again would be people purchasing lifestyle or investment property with a view to future retirement living.
"Obviously, the baby boomers would form a very large category in that location."
Brasier says the other big trend involving baby boomers is the inner-city property market, with activity strong over the past five years as investors have bought into the inner-city markets in Sydney, Melbourne and Brisbane.
"Once again, a lot of that is people purchasing investment property with a possible view to future retirement," he says. "That's been another strong trend.
"A lot of them are blending investment with future retirement or lifestyle, so they might be purchasing their townhouse on the Central Coast and leasing that out for five years with a view to maybe retiring into that."
Robert Papaleo, director of strategic property consulting group Charter Keck Cramer, agrees, adding that a lot of activity has been generated by small, do-it-yourself superannuation funds taking a greater focus on residential property.
"When you start talking about the residential property market and baby boomers, your mind turns towards how they can blend the investment potential of a property asset with a lifestyle twist," Papaleo says.
"As a result, we've seen a lot of activity down in the coastal markets as well as the sea-change and tree-change markets.
"The regional rural townships within one to two hours' drive of the main cities, where they perform the dual function of being a weekend getaway before they actually retire, have been a very positive investment in terms of capital growth over the last few years."
Greg Hocking, managing director of real estate group Hocking Stuart, says the baby boomer generation has probably had the greatest appreciation of building wealth through the property market.
"It's one of the fundamental bulwarks against inflation eating away at their superannuation when they finally do retire," he says.
"Property is not only going to generate capital wealth but provide them, if they do it right, with regular income into their retirement. They're buying inner-city, period-style homes or older-style apartments for the best capital appreciation in the blue chip suburbs where the rental demand is high."
Monique Wakelin of Wakelin Property Advisory notes that the type of property investment being bought by baby boomers depends on their age.
"The younger ones, between 45 and their early 50s, are acutely aware that if they've not taken the initiative to start an investment strategy, they are under enormous pressure to do that," Wakelin says.
"They have a great sense of urgency in their desire to fast-track their accumulation of assets." Wakelin says baby boomers are typically spending between $250,000 and $550,000 on compact properties that they can generate passive income from, and eventually retire to.
"Where they're in the lower price category, closer to the $250,000 to $350,000 category, they're typically wanting them as straight-out investments with no future lifestyle element at all.
"They are then investing in low-rise well-established blocks of apartments - generally two-bedroom apartments."
Wakelin says the biggest pitfall for baby boomers is the created perception that you can own a particular property for a only small amount of money a month and yet it will provide an immediate positive cash flow. "That is apparently very attractive at face value - it's very attractive to have an asset and income, and if they're close to retirement they're not going to be generating as much of their income through their own personal exertions.
"So that pitfall is very real and it's very potent, to be offered an immediate positive cash flow like that if you're about to retire.
"The pitfall associated with it is that they're not actually buying into a resource that is scarce or limited in supply, and so the underlying value of the asset actually diminishes over time and therefore so will the long-term income."
