With the first of the oldest baby boomers reaching the "official" retirement age next year, what do you guys think will be the impact on various assets, and in particular the various property markets in australia? Which asset and prop markets will benefit and which will loose out ?
Baby boomers: born from 1945 - 1965 (or thereabouts)
Official retirement age: 67
Rough retirement period: 2012 - 2032
I have been pondering over this change for a while now because I think it will have a huge impact on asset prices and direction, and I am still unsure how it will play out. From the other thread it looks like MIW, a very seasoned investor, also has this on his mind.
In general I think baby boomers will start retiring or at least working part time. GFC has simply delayed this trend by few years. The biggest impact will be the substantial reduction of income and they will need a way to supplement at least part of that lost income. They will stop acquiring and start divesting assets. Yield will be the bigger factor than capital growth.
My opinion is they will sell off negative geared props. From personal experience, I talked with a some agents about a number props and asked they why the owner was selling. I am hearing "investor looking to retire / pull money out" quite often now. I mean its just a very very small sample of the market, but it does make sense. If you have a negatively geared prop and your income is reducing chances are you will sell out.
Downsizing would be another trend.
Being close to employment centers will not be a factor. Bigger factors will be lifestyle location and proximity to family.
I also think they will (already have) reducing their share holdings i.e. convert from growth supers etc to "balanced" or income/yield supers. They will look for income, bonds, term deposits etc.
Any other views out there??
Baby boomers: born from 1945 - 1965 (or thereabouts)
Official retirement age: 67
Rough retirement period: 2012 - 2032
I have been pondering over this change for a while now because I think it will have a huge impact on asset prices and direction, and I am still unsure how it will play out. From the other thread it looks like MIW, a very seasoned investor, also has this on his mind.
In general I think baby boomers will start retiring or at least working part time. GFC has simply delayed this trend by few years. The biggest impact will be the substantial reduction of income and they will need a way to supplement at least part of that lost income. They will stop acquiring and start divesting assets. Yield will be the bigger factor than capital growth.
My opinion is they will sell off negative geared props. From personal experience, I talked with a some agents about a number props and asked they why the owner was selling. I am hearing "investor looking to retire / pull money out" quite often now. I mean its just a very very small sample of the market, but it does make sense. If you have a negatively geared prop and your income is reducing chances are you will sell out.
Downsizing would be another trend.
Being close to employment centers will not be a factor. Bigger factors will be lifestyle location and proximity to family.
I also think they will (already have) reducing their share holdings i.e. convert from growth supers etc to "balanced" or income/yield supers. They will look for income, bonds, term deposits etc.
Any other views out there??