As the population of Australia continues to grow and evolve, so do the opportunities and challenges in the property investment market.
Recent demographic changes are set to have a significant impact on Australian property investment, with shifting age demographics and changing household structures affecting the demand and supply of properties.
In this blog, we’ll explore the impact of these changes and how they can influence your investment decisions.
Shifting Age Demographics
One of the most significant demographic changes affecting Australian property investment is the ageing population.
With baby boomers entering retirement age, there is a growing demand for retirement living, aged care facilities and for smaller properties (2 or 3 bedroom rather than the traditional 4 bedroom home).
Retirees are increasingly turning to dual-occupancy or duplex style housing as an attractive solution.
This housing option has gained immense popularity among retirees and is one of the reasons many of our property investors are adding these type of properties to their portfolio.
Over the last few years they have gained significant popularity among property investors looking to expand their portfolio and is a good way to diversify.
With a large percentage of our baby boomers retiring this presents a unique opportunity for property investors looking to capitalise on this growing market segment.
According to recent reports, the demand for retirement living is set to double over the next 20 years, with an estimated 5.5 million Australians aged 65 and over by the end of 2024.
At the same time, younger demographics, such as millennials and Gen Z, are also changing the property investment landscape.
These groups are less likely to own their own home and are instead doing the rentvesting model – opting for alternative forms of living, such as co-living and apartment living which they rent whilst also purchasing an investment property.
As an advocate of rentvesting, who has successfully employed this strategy for multiple property acquisitions, I can attest to its merits. Allow me to shed light on the rationale behind rentvesting and its array of advantages here.
As such, property investors need to adapt their investment strategies to cater to the changing needs of these demographics.
Changing Household Structures
Another demographic change impacting Australian property investment is the changing household structures.
The traditional nuclear family is no longer the dominant household structure in Australia, with single-person households and single-parent families on the rise.
This presents a unique opportunity for investors to cater to the growing demand for smaller, more affordable properties.
Additionally, with more people working from home, there is also an increased demand for properties with dedicated home offices or workspaces.
Furthermore, changing household structures also mean that investors need to consider the changing needs of tenants.
For instance, single parents may require childcare facilities and schools nearby, while single-person households may prefer access to entertainment and lifestyle amenities.
Adapting to Demographic Changes
As the Australian population continues to evolve, property investors need to adapt their investment strategies to cater to changing demographic needs. This includes considering factors such as proximity to amenities, transport links, and lifestyle offerings, and investing in properties that meet the needs of specific demographic groups.
For instance, investors targeting the retirement living market may want to consider investing in properties with easy access to medical facilities, shopping centres, and other essential services.
Meanwhile, investors targeting younger demographics may want to focus on properties with shared spaces, co-working facilities, and easy access to public transport.
As Australia’s population continues to grow and evolve, so too does the property investment landscape.
Demographic changes such as shifting age demographics and changing household structures are set to have a significant impact on the market.
Property investors need to adapt their investment strategies to cater to the changing needs of specific demographic groups and consider the regulatory environment and tax implications of property investment.
If you’re looking to invest in Australian property and need guidance on how to adapt to these demographic changes, reach out to Leonie at leonie@wealthology.com.au. Our team of experts can help you navigate the complexities of the property market and take your first step towards success
