Hot house price market enjoyed by baby boomers to ease
The next generation of Australians are unlikely to see anything like the house price appreciation that has been enjoyed by ageing baby boomers, with a study by the Swiss-based Bank for International Settlements (BIS) saying that increases over the next 40 years will be about 30% less than now.
The study, which looked at the global influence of an ageing population, showed that Australian house prices had been the fourth fastest growing in the world over the past 40 years by rising just under 200%.
The research rejected any suggestion that the retirement of baby boomers would now be accompanied by an asset price crash but noted that capital growth would be much harder to achieve.
The BIS said it did not expect demographic factors such as an ageing population alone to dictate house prices but the research suggests “that in the next 40 years house prices in advanced economies will face a more difficult environment than in the past 40 years”.
The forecasting model for the period 2010 to 2050 still has Australia faring better than the United States, Canada, New Zealand, or Ireland in managing to maintain reasonable housing marker price increases.
