Downsizers flock to Victoria’s seaside towns, which could push house prices up | Finder

Experts believe some of the state’s towns could see home prices surge from next year after Baby Boomers gain access to their superannuation. SEE THE DOWNSIZER HOTSPOTS.

Sarah Petty

3 min read

November 9, 2024 - 5:01AM

2/19 Simpson St, Point Lonsdale is listed for sale with $2.4m-$2.64m price hopes — located in one of Finder’s downsizer hot spots.

Cashed-up Baby Boomers could be set to turn a handful of Victorian coastal hamlets into property price boom towns.

With the entire Boomer generation able to access their super from next year, retirement moves have been tipped for an increase in 2025.

New research from Finder shows downsizers are already homing in on Portarlington, Point Lonsdale, Paynesville, Mornington, and Lorne along the state’s coastline, with more than a third of each suburb’s population aged 65-plus.

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And in Melbourne, some of the city’s most-prestigious suburbs are also home to larger proportions of retirement-aged residents including Toorak, 27.3 per cent, East Melbourne, 21.4 per cent, and South Yarra, 21.2 per cent.

The research firm analysed Australian Bureau of Statistics data, combining the percentage of people in every suburb who are aged 65 with the percentage of people who lived at another address a year ago to estimate the popularity of a suburb among Victorian downsizers.

1/140 Newcombe St, Portarlington is listed for sale.

The three-bedroom unit is listed with a $760,000-$790,000 price tag.

McGrath Estate Agent’s chief executive John McGrath said by next year, he was expecting many Baby Boomers to make a sea-change, selling suburban homes and taking big budgets to comparatively affordable coastal towns “with a steady price uplift inevitable in the most popular locations”.

“The allure of the coastal azure is one of the trends we explore this year,” Mr McGrath said in his 2025 report.

“The Baby Boomers hold half of Australia’s private wealth, so when a lot of them are buying and selling at the same time, it has the power to move markets.”

Finder head of consumer research Graham Cooke said the beachside destinations his firm had identified were popular for downsizers now, which would probably continue in the future and potential lead to price rises down the track.

“In a lot of cases, (downsizers) have paid off their mortgage on a bigger house … which means they have more potential to puff up the housing prices in those areas,” Mr Cooke said.

East Melbourne was another area that downsizers were buying into.<a href="https://www.realestate.com.au/property-apartment-vic-east+melbourne-146331420?sourcePage=rea:p4ep:property-details&sourceElement=avm-currently-advertised-view-listing"> 12/322 Albert Street, East Melbourne</a> is on the market with a $1.35m-$1.485m price guide.

East Melbourne was another area that downsizers were buying into. 12/322 Albert Street, East Melbourne is on the market with a $1.35m-$1.485m price guide.

He added that anywhere that had a high population of retirees who were downsizing tended to see robust property prices moving forward; it was unlikely someone over the age of 65 was going to be paying for a home with a mortgage.

“They will generally be buying their houses outright … so they’ll have more money to play with,” he said.

This comes as Money.com.au research reveals Melbourne house prices have grown by a whopping 3496 per cent since 1975 — around the time many Baby Boomers were in their 20s and purchasing their first home.

House prices now are about 12 times the city’s median wage with a typical house costing about $1.032m.

5/2-10 Ocean Road South, Lorne is listed for sale.

This two-bedroom apartment listed with $950,000 price hopes.

In the 1970s, the average monthly mortgage repayment in Melbourne was 37 per cent of the standard monthly wage, compared to 91 per cent today.

Money.com.au research and data expert Peter Drennan said the Silent Generation and Baby Boomers bought homes when prices were just 4-5 times the median wage, while today’s families were paying double to triple that at 12 times their earnings.

He added that as Boomers accessed their superannuation, the housing market could heat up with many likely to downsize, invest in property or help family members buy homes.

“While some Boomers may sell off assets, adding a bit of supply, the overall impact could still add fuel to an already competitive housing market,” he said.

“It’s going to be nearly impossible to buy property in Melbourne or any capital city on an average income.”