Ageing baby boomers to cause slowdown in house prices

Monday 20 September 2010

Article by Mozo

The next generation of Australian home buyers will see house prices rise at a much slower rate than that seen by the previous generation of "baby boomers", new research suggests.

A study by the Bank for International Settlements (BIS) claimed that Australia's ageing population will mean that house price increases over the next 40 years will be about 30 per cent less than they would otherwise have been, the Australian reported.

The research, which set out to examine the global influence of an ageing population, also revealed that Australian house prices have been the fourth fastest-growing in the world over the past 40 years, rising just less than 200 per cent.

However, the report rejected suggestions that the retirement of the baby boomers will lead to an asset price crash, claiming instead that capital growth will simply be much harder to achieve.

Such trends are likely to impact on new house buyers looking to compare home loans and secure a property over the coming years. According to the Australian, the BIS study also found that share prices will take a hit as a growing proportion of the population retires and starts living off their capital.

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