Baby boomer housing bust calls for quick action
Australia is closer to the US than any other country when it comes to the property market; its trends and its rising and falling sentiments. Having said this, Australia is faring a lot better because it has got its economic foundation firmly in place. Nicole Gurran for the BRW writes that the baby boomer housing bust which the US is facing might become the story of Australia too, albeit with a few marked differences.
Baby boomers have always found suburban spaces to be their favorite dwelling areas but today, the trend is heavily shifting. There are three prime reasons for it:
- They are downsizing, seeking inner city apartments
- Lack of healthcare facilities is driving them away from coastal and suburban areas
- They are not too keen on McMansions anymore
More baby boomers downsizing
In the US, this has brought an avalanche of unsellable homes to the fore. The scene in Australia is not too bright on this particular front either. There are new homes being added to the market every passing day, with higher number of baby boomers downsizing. Moreover, on sheer evidence, the number of +65 citizens is likely to get stronger from here and unless the trend reverses, we will have a lot more homes coming within the “up for sale” or “abandoned” bracket.
A paradigm shift
Another paradigm shift is evident in the decision of the young adults to stay in their parents’ home. Earlier, young adults rented homes in the transitive phase of their lives and progressed thereon, buying homes as they moved forward in time. Presently, they do not mind living with their parents and save money for future. This is also pushing baby boomers to buy close to the inner city where the offices of their children are likely to be close by.
Different techniques used by Australia and the US
While the US plans the suburban shift for its senior citizens and looks into plus size land allotments, cheaper disbursal of loans and associated highway development, Australia falls on its urban planning barometer; forecasting trends and working accordingly.
The way ahead
- Granny homes provide income streams to retirees and thus they should be encouraged
- Subdividing can really help, allowing children to stay longer
- The good old terraces need to be paid due attention
- Sloppy high-rise building developments need to be cut down
- Old suburban homes must be retro-fitted
Subdividing may not be too bright an idea
Nicole Gurran casts a stern and timely glance on the baby boomer housing bust . I quite like the various pieces of advice she offers and trends she observes. For me, the only point worth debating is her stance on Subdividing. While it can really allow children to stick longer to parents and cut down on the housing pressure, it has also got a few disadvantages.
There are various costs involved in Subdividing:
- Potentially pulverizing the present home
- Local council fee
- Realtor fee
- Rental fee (till the time the home is ready)
- Cost of labour and material
- Capital gains tax
You can read the full article here.
Would you want to subdivide or create a granny flat?