Downsizers are the favourites to get the most out of the property market in 2020, predicts Australia’s largest national body representing professional buyer’s agents.
Real Estate Buyers Agents Association (REBAA) president Cate Bakos said with softer lending conditions and strong property prices tipped to continue in 2020, cashed up downsizers looking to sell the family home and move into apartments or regional areas were in the box seat.
“Interest rates will be the big game changer this year,” said Ms Bakos.
“The other major factors likely to impact the property market will be whether we have macro prudential changes, or more vendors coming on, or a combination of all those things.
“There is no doubt that wealthy older buyers – downsizers, baby boomers, empty nesters, retirees – we can term them with a few descriptors, will be a powerful force in the property market in 2020 and one that won’t be going away soon.
According to data released by the Australian Bureau of Statistics, older Australians are capturing an increasing share of the nation’s wealth, and the house price boom is a major cause of the growing divide between the generations.
Research from the Grattan Institute shows that even after taking out inflation and despite the damage caused by the global financial crisis, households headed by 65-74 year-olds were on average $480,000 wealthier in 2015-2016 than households in the same age group 12 years ago.
“It’s evident that many of our capital city inner-ring property auction losses are at the hands of a more mature generation and with potential for further low interests, softer lending conditions and low stock levels, it could be ‘the perfect storm’ for downsizers this year,” said Ms Bakos.
“The sorts of challenges that most buyers face including valuations and gaining finance approval, is obviously not a concern for a buyer who is not impacted by a shortfall.
“Low Loan to Value Ratios or cash purchases eradicate any concerns about valuation dilemmas making this class of buyer formidable opposition at any auction.”