Baby boomer demand for apartments could change the face of Adelaide real estate, according to Raine & Horne.
South Australians’ preference for detached housing is reflected in recent research showing the capital city values have grown consistently since June 2016, with detached housing values increased by 3.1% compared to a modest 0.3% for apartments, according to CoreLogic. However, baby boomers are taking up incentives to downsize, which could increase the popularity of apartments.
“This research demonstrates that Adelaide buyers traditionally favour detached housing, however with our ageing population, it’s fair to expect more high-density developments will be required as baby boomers and empty nesters weigh up more manageable options,” said Michael McDonald, General Manager, South Australia, Raine & Horne.
“Moreover, with our median house price in Adelaide at $460,000, and the unit median price stable at $365,000, the time is ripe for downsizers to buy a property suitable for their stage in life.”
Mr McDonald noted that there is some evidence that Adelaide retirees are taking advantage of the Federal Government’s $300,000 incentive to downsize.“
Homeowners aged 65 and over, who sell a home they have lived in for 10 or more years can make a non-concessional contribution of up to $300,000 into their super from the sale proceeds,” he said.
“This is proving a popular measure, and now the South Australian government could do its bit by reducing the stamp duty impost for retirees aged over 65.
“The trouble is that if an empty-nester moves into townhouse worth $400,000, there’s stamp duty of almost $16,000 to pay, which represents a major hit to their retirement nest egg.”
Baby boomer housing hotspots
Bowden, an inner northern suburb of Adelaide is a potential baby boomer hotspot, noted Mr McDonald.
“The suburb is 3 minutes by car to the new Queen Elizabeth Hospital and walking distance to Royal Adelaide Golf Club, while apartments are a very affordable $436,000.
“The Bowden region has been built on the old Clipsal Electrical site, which has been demolished over the last 5 years and new apartments and town houses are popping up there.”
West Lakes in the Port Adelaide area is proving popular with downsizers according to Kate Smith, Principal of Raine & Horne Semaphore.
“The new West development, which is part of the old Football Park precinct, is offering modern, multi-level, “lock and leave” apartments, which are proving popular with retirees,” said Ms Smith.
“In the West precinct, new two-bedroom apartments are valued between $400,000 – $500,000, which will suit the budgets of older homeowners seeking to downsize.”
Westlakes is also close to the new Queen Elizabeth Hospital, while the beaches are just 5 minutes by car.
“West is 20 minutes to the CBD, while the West Lakes Mall has been upgraded and includes medical tenants such as doctors and dentists, which has been duly noted by downsizers, said Ms Smith.
“If you purchase in the West development, you’ll have a view of West Lakes Golf Course, which is another tick in the box for baby boomer buyers.”