The Melbourne property market is forever evolving – a good example is how agents adapted to online Zoom auctions during the COVID lockdown.
Another dynamic change we are seeing is the effect Baby Boomers are having on the property market. There are over 5.0 million Baby Boomer Australians aged 57-75, one of Australia’s largest population groups. They are cashed up, healthier than previous generations and aren’t heading to the retirement village any time soon!
Many Baby Boomers are financially sound and can help their children enter the property market, and we see more examples than before.
Why do the Baby Boomers need to help?
- Bank lending practices have changed, including the tightening of responsible lending regulations.
- The new rules have caused a significant impact on young people and first home homebuyers.
- Banks more than ever scrutinise income to determine it is sufficient to live and service a mortgage.
- Reaching up to 20% deposit is a challenge, plus the expense of stamp duty.
- Wage growth hasn’t kept pace with property price growth.
- Melbourne median prices are rising – in March this year, the median house price in Melbourne exceeded $1 million.
- Baby Boomers are in an excellent position to help as they have good superannuation balances, and the value of their homes has risen significantly.
At a recent auction, we were bidding on behalf of a client. We witnessed intense bidding with five bidders, and the successful bidder was a father-son team. We later found out that he would not have succeeded in this highly competitive auction scenario without the financial assistance from his Baby Boomer parents.