Latest NewsRetirees Driving Unit BoomSaturday, 06 May 2017

Baby Boomers will continue to be the main drivers of Sydney's residential market over the next five years with their take-up of medium- and high-density living.

The generation of ageing, downsizing owner-occupiers - rather than younger renters - is expected to occupy an increasingly larger proportion of units and townhouses as the population ages, the real estate research firm BIS Shrapnel said.

''Activity in the Sydney residential market has largely been driven by the passage of the baby-boomer generation - firstly in the 1970s and early 1980s as first-home buyers and then as second and subsequent upgrading from the mid-1980s to the present," the BIS Shrapnel managing director, Robert Mellor, said.

''With their children having left the family home and retirement approaching, I expect this group will become an increasingly important source of occupier demand for higher-density dwellings between 2011 and 2015.''

Advertisement: Story continues below But BIS Shrapnel suggests downsizing baby boomers will move to Sydney's outer-ring suburbs, rather than the inner-city.

It is likely they will remain in the middle ring or, increasingly, outer-suburb locations where more affordable prices will allow them to trade down from their dwelling and ''still have change left over''.

Detached house construction in Sydney will be less prevalent as a result.

''After accounting for around 50 per cent of total dwelling activity in the 1990s, houses have comprised less than 40 per cent of total dwelling approvals in the last decade,'' Mr Mellor said. ''High vacant land prices have tipped demand towards new multi-unit dwellings, with this balance expected to be maintained over the next five years.''

With interest rates expected to tighten and put further strain on affordability, BIS Shrapnel expects price growth in the middle- and outer-ring suburbs of Sydney to outpace price growth in inner-Sydney over the next five years.

Unit price growth is forecast to average about 5 per cent a year in inner-Sydney suburbs, but about 6 per cent in the middle-and outer-ring suburbs.

Previous Next

Share This Article




Previous Articles