When people get older, they’ll marry and have children. Then they’ll want a bigger home with space outside for the children to play. They’ll also be able to afford something bigger and better, in a nicer area—the kind of property that’s likely to be in the suburbs of cities and towns. As they move into their larger houses with gardens, the demand for the small apartments and units they once lived in will fall.
As they reach retirement, and with their children having left home, our once-young generation will no longer need to live in a large house and may choose to downsize and move out of town altogether, perhaps to the coast, where they can relax and enjoy a better quality of life. So, while demand for such places will rise, demand for large suburban houses will fall.
Finally, in the later stages of their lives, our now long-gone youngsters move back closer to the city, to be near amenities such as public transport, shopping and healthcare, which they may increasingly require. They buy retirement homes – small, single storey houses with no stairs to negotiate and minimum upkeep. Demand for these rises and that of the coastal properties falls.
Of course, at a detail level, the picture is far more complex than this, but it does give an idea of how ‘population waves’ can have an impact on property prices, as first one type of property is in demand and then another.
Three such population waves have been identified since the end of WWII.
- First came the Baby Boomers, born after WWII and now typically over 60. Research shows they tend to stay on in the family home, but in time it’s likely they will be looking for smaller homes either in the same area or in rural or coastal locations.
- Typically aged in their early thirties to fifties, Generation X often have homes near city centres, close to their jobs, entertainment and good transport links. They’re increasingly looking for larger houses in the outer suburbs, maybe five to fifteen kilometres from the centre of town.
- Gen Y are typically under 30, and are currently renting in inner city suburbs. Research shows increasingly they will want to buy in the inner suburbs and trendy urban locations.
Go to this website to view our FREE advanced property investment video series,
this will get you on the right path for financial freedom: