Baby boomers face housing paradox despite property wealth

Baby boomers find themselves in a complex housing situation in Australia, despite widespread perceptions about their property wealth.

Nerida Conisbee, Chief Economist at Ray White, says the reality is more nuanced than many young Australians believe.

While boomers have benefited from rising property values, they are also experiencing the fastest growing rate of homelessness among age groups.

“Australia has 13 million spare bedrooms and most of them are in fully owned homes of older Australians,” Conisbee said.

She notes there are limited incentives for downsizing, as the family home is a tax-free asset and suitable smaller properties are often scarce.

Emotional attachments to long-held homes also discourage downsizing for many boomers.

Conisbee acknowledges housing has become far less affordable over time compared to when boomers entered the market.

However, she points out that lending conditions were more restrictive in the past, especially for women.

“Housing is much more expensive now but lending is far less restrictive,” she said.

While exact data is limited, Conisbee suggests many boomers have likely profited from property investments given significant price rises over their lifetimes.

But a concerning trend is emerging alongside this wealth accumulation.

“Over the past 15 years, people aged 55 to 74 years have seen a 62 per cent rise in homelessness, the highest of any age group,” Conisbee said.

She cites factors like limited income potential in retirement, health issues, and financial vulnerability following divorce as contributors to this trend.

Older renters also face increasing competition from younger generations in a tight rental market.

This paradoxical situation highlights the complexities of Australia’s housing challenges across generations.