REALESTATEVIEW.COM.AU BABY BOOMERS REPORT JULY 2014

Transcription

1 REALESTATEVIEW.COM.AU BABY BOOMERS REPORT JULY 2014

2 ABOUT THE BABY BOOMERS REPORT Commissioned by realestateview.com.au in July 2014, a survey was conducted of 2,554 baby boomers via an online questionnaire. Of the respondents that specified locations, the breakdown of locations was as follows: VIC (47.9%), NSW (21.20%), QLD (10.7%), SA (7.0%), WA (6.5%), TAS (4.7%), ACT (0.8%), NT (0.67%). The survey asked baby boomers aged to respond anonymously to 24 questions about their perspective on the property market, as well as their lifestyle aspirations in retirement. The survey sought to obtain a comparative overview of baby boomers sentiment on the housing market, lifestyle preferences, affordability concerns and their plans for retirement 2

3 DEMOGRAPHIC SNAPSHOT No children 19% Female 68% Have children 81% Male 39% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 3

4 CURRENT LIVING SITUATION Nationally, 47.5% of baby boomers are still living in their long term/family home This was higher in Victoria at 50.7%, but lower in NSW at 44.3% 30% are living in a house that isn t their long term home CURRENT LIVING SITUATION Family home (longterm/house in which they raised a family) House (not family home) National Victoria NSW 47.5% 50.7% 44.3% 30.0% 27.6% 28.8% A minority are living in units (7.8%) apartments (5.8%) or townhouses (5.4%). However, apartment living was much more popular amongst NSW baby boomers - more than double (10.9%) than their VIC counterparts (4.8%) Other responses included farms/acreage, granny flats or living with family, caravan/relocatable homes Apartment 5.8% 4.8% 10.9% Unit/villa 7.8% 7.6% 8.4% Townhouse 5.4% 6.8% 5.5% Other 3.5% 2.5% 1.9% 4

5 AFFORDABILITY: PROPERTY PREFERENCES AND CONCERNS ABOUT THE MARKET 5

6 BUYING PROPERTY Baby boomers are divided between those who plan to move and those who want to stay put. Half of baby boomers (50.8%) are currently looking to buy property. The remainder are divided between those who want to stay in their current home and those who are stuck on the rental roundabout Reflecting the affordability concerns of baby boomers, one fifth are renting, and 8.9% have no intention to buy property With Sydney house price growth leading the nation, baby boomers in NSW appear to be hardest hit by affordability. The proportion of renters in NSW (25.3%) was higher than the national average (22%) with just one tenth (12.8%) of these in the market looking to buy OWNERSHIP STATUS Rent your home but are looking to buy in the near future Rent your home and are not looking to buy a property Rent your home but own an investment property Living with family but looking to buy in near future Living with family and not looking to buy Own your home, not looking to buy Own your home, are looking to buy in the near future National Victoria NSW 11.1% 9.5% 12.8% 8.9% 6.8% 10.9% 2.0% 1.8% 1.7% 4.8% 5.1% 3.1% 3.5% 3.5% 5.5% 34.8% 36.2% 32.9% 34.9% 37.2% 33.1% 6

7 HOUSE PRICES Contrary to the belief that baby boomers will retire on property wealth and superannuation, their choice in property tells a different story: The majority are looking for property in the lower to mid price ranges and are concerned about current house prices; only a minority (8.6%) are searching for property in the million dollar range. Two thirds of baby boomers (66.8%) nationally are looking to buy for under $600,000, with over half of these looking for property under $400,000. Victorian baby boomers appear to be the most affluent. While NSW was on par with the national average, there were more Victorian baby boomers looking for property in the higher price ranges of $800,000-$1million and over $1million. Price range National Victoria NSW <$400k 36.6% 29.8% 32.3% $400-$600k 30.2% 29.1% 30.7% $601-$800k 16.2% 19.8% 15.7% $801K-$1million 8.6% 10.4% 10.9% >$1million 8.3% 10.9% 8.5% 7

8 TIME IN MARKET Testimony to the affordability concerns of baby boomers, a quarter of buyers have been in the market for property for over three years. Reflecting rapid price growth and market competition in Australia s largest cities, 25% of baby boomers have been looking to buy for over three years Time in market National Victoria NSW <3 months 31.5% 29.5% 29.8% 3 to <6 months 15.6% 16.1% 16.9% 6 months to 12 months 14.4% 15.3% 15.3% 1 to <2 years 8.8% 9.0% 7.7% 2 to <3 years 4.5% 4.9% 5.2% 3+ years 25.3% 25.3% 25.0% 8

9 CURRENT ATTITUDES TO HOUSE PRICES Baby boomers are grappling with affordability pressures. The majority of baby boomers do not believe they are well off and are concerned over the impact of current house prices. 15.5% feel they are being priced out of the market by other buyers A sign that baby boomers in NSW are struggling most with affordability, their discomfort with house prices was higher than their VIC counterparts and the national average. Just 39.7% are comfortable with prices, while a further 19.6% felt they were being outpriced by other buyers. Attitude to house prices Comfortable with house prices Uncomfortable with house prices I feel I am being priced out/outbid by other buyers National Victoria NSW 51.0% 51.7% 39.7% 33.5% 32.2% 40.7% 15.5% 16.1% 19.6% With Sydney house price growth leading the nation, it s no surprise baby boomers in NSW are most affected by affordability there s a real fear over the widening gap between cost of living and income in retirement, and a realisation among some that funding a comfortable retirement may mean moving to a cheaper area. Petra Sprekos, General Manager, realestateview.com.au 9

10 BABY BOOMERS VIEW ON YOUNG HOME BUYERS TODAY Today's generation have it easier 18% Today's generation have it tougher 56% Neutral 26% Despite buying property during the late 1980s and early 1990s when interest rates reached 17%, more than half of baby boomers (55%) believe young buyers today have it tougher entering the housing market. Baby boomers sympathise with young buyers because they, too, are grappling with affordability pressures. Over half (56%) think they had it easier when trying to buy their first home. 10

11 RETIREMENT: LIFESTYLE PREFERENCES AND CONCERNS 11

12 HOUSING PREFERENCES FOR RETIREMENT Affordability dictates downsizing preferences and locations - 56% of baby boomers are looking to downsize to a smaller house/apartment, compared with 34.4% who want to stay in the family home. More Victorian baby boomers (57.7%) are planning on downsizing than their NSW counterparts (51.2%). Baby boomers also appear to value their independence, with retirement communities heavily out of favour. Housing option in retirement National Victoria NSW Downsize to a smaller apartment 56.0% 57.7% 51.2% Stay in family/long time home 34.4% 34.4% 36.9% Live with children (spare room, granny flat) 3.6% 2.3% 5.7% Retirement village/community 6.1% 5.6% 6.3% 12

13 REASONS FOR DOWNSIZING The dream for the sea change lifestyle still dominate double the number of baby boomers desire a sea change over a tree change. Affordability is again at play, with one fifth of baby boomers using downsizing as a tactic to boost retirement savings, and 16% can t afford to live in their current home in retirement. Of those who are downsizing, physical maintenance and affordability were key drivers almost one fifth can t afford to stay in their current property in retirement Reasons for downsizing National Victoria NSW I won t be able to physically maintain the property I want to reduce upkeep/maintenance of my home I can t afford to live in my current property in retirement 35.5% 35.7% 31.6% 56.4% 56.2% 56.1% 16.2% 14.8% 18.4% I want to boost my retirement savings 22.5% 23.1% 18.4% I want a sea change (coastal area) 21.1% 21.2% 25.9% I want a tree change (rural area) 9.6% 9.9% 7.9% Other 8.1% 9.1% 7.0% 13

14 DOWNSIZERS CHOICE OF LOCATION Of those who are downsizing, more will need to live away from their family home than not. The next page outlines motivators for why baby boomers are moving away. Location National Victoria NSW In the same area as long time/family home In a different area from long time/family home In a different state to family/long time home In a different country to family/long time home 35.6% 40.3% 32.3% 47.6% 47.2% 51.2% 12.0% 10.1% 13.0% 2.8% 2.3% 3.5% 14

15 REASONS FOR MOVING TO A DIFFERENT AREA FROM FAMILY HOME Reason for moving to different area National Victoria NSW A seachange and affordability were key motivators for baby boomers moving to a new area. Once again, baby boomers in NSW were most heavily impacted by affordability, with 41% moving to a new area due to affordability The sea change lifestyle resonates strongly with Sydneysiders (49.7%) it is much higher than the national average (37.7%). I want a sea change 37.7% 36.7% 49.7% I want a tree change 14.5% 15.2% 11.0% More affordable property prices 30.2% 25.3% 39.4% To be closer to family/friends 21.0% 20.1% 17.4% Better services (public transport, shops, healthcare) Better social activity/entertainment (community activities, entertainment, restaurants) 17.1% 16.0% 12.3% 21.3% 20.4% 20.0% Closer to the city 12.9% 14.1% 5.8% Other 8.0% 8.2% 6.5% 15

16 CONCERNS ABOUT LEAVING THE FAMILY/LONG TIME HOME Don't have any concerns Concerned about giving up space Worry they won't enjoy living in a new area/home Concerned about being socially isolated in a new area Emotionally attached to the home Concerned about paying too much for a smaller property Concerned about leaving friends/family Moving away from family and friends and paying too much for a smaller property were the leading concerns of those worried about moving out of the family/long time home. Interestingly, a significant 43.6% of baby boomers didn t have any concerns about leaving the family home. 16

17 FUNDING RETIREMENT Contrary to the belief that baby boomers will retire on property wealth, the majority are heavily reliant on their superannuation with many concerned this won t be enough. 37.8% believe they won t have enough money to fund retirement This concern was higher in NSW (41.2%) but lower in VIC (33.3%) further proof that NSW baby boomers are most concerned about their financial future. Over one fifth (22.2%) of baby boomers will be reliant on government pension, compared with just 12.1% who are selffunded, a worrying finding given the recent increase to the pension age and slow jobs growth. Source of retirement income National VIC NSW Other 3.8% 3.3% 5.1% Selling an investment property/properties 4.3% 4.7% 3.5% Rental income from investment property/properties 8.0% 9.4% 6.7% Government pension 22.2% 17.8% 22.6% Reverse mortgage 0.3% 0.1% 0.5% Income from part-time/casual job 6.1% 5.3% 6.1% Selling the family home 6.8% 7.6% 7.0% Self-funded/personal savings 12.1% 12.4% 10.2% Superannuation 36.3% 39.5% 38.4% I am confident I will have adequate funds in retirement National VIC NSW Confident 29.1% 32.2% 29.4% Neutral 33.1% 34.5% 29.4% Not confident 37.8% 33.3% 41.2% 17

18 QUALITY OF LIFE AND PRIORITIES IN RETIREMENT Baby boomers hopes for the lifestyle they wish to lead in retirement are being tempered by concerns of making ends meet. How much do you need to live comfortably in retirement? National More than half of baby boomers said they would need over $46,000 per annum to live comfortably in retirement higher than the estimated $42,254* experts say is required in retirement. *Estimate from the Association of Superannuation Funds of Australia (ASFA) for a single homeowner to live comfortably. AFSA also estimated couples need $57,817 to live comfortably in retirement. Priorities in retirement 1. Holidays 2. Health and fitness 3. Social outings/entertainment 4. Dining out 5. Shopping 6. Other Less than $20, % $21,500-$25, % $26,000-$30, % $31,000-$35, % $36,000-$40, % $41,000-$46, % $47,000-$50, % $51,000-$55, % $56,000-$60, % $60, % 18

19 PLAN MELBOURNE ZONING 19

20 PLAN MELBOURNE ZONING LEVELS OF CONCERN Will not impact me 5.8% There is widespread concern among Victorians about the impact of new zoning rules under Plan Melbourne on the areas they want to buy in. 72% are concerned in some way about its impacts. I don't know what I think yet Did not know about the new zoning laws Not concerned 14.4% 14.4% 31.2% Of these, 28% will reconsider their choice of suburb (refer to next page). Concerned about the impact on the quality of developments they want to buy in 18.5% However, the jury is still out with around a third not at all concerned, and a further 35% unsure or not impacted by Plan Melbourne. Concerned about the impact on liveability Concerned about the impact on house prices Concened about the availability of townhouses/units/villas in the areas they want to buy in 22.0% 15.7% 18.0% 0% 5% 10% 15% 20% 25% 30% 35% 20

21 PLAN MELBOURNE ZONING IMPACT ON CHOICE OF SUBURB I don't know how it will affect my choice 24.8% I did not know about new laws 8.4% Will not affect my choice as my area is not changed by zoning laws 21.0% Doesn't matter as long as I am close to shops/amenities/transport 17.5% Will reconsider as I don't want to live in high density 15.0% Will reconsider as new laws will impact property values in area I want to live in 5.0% Will reconsider as don't want to be limited by property choice 8.0% 21

22 Contact details Anna Kenneally / Mia Cochrane at Keep Left anna@keepleft.com.au mia@keepleft.com.au (03)