Baby boomer demand for apartments is set to change the face of Adelaide real estate, according to one real estate group prominent in South Australia.
General manager at Raine & Horne South Australia, Michael McDonald, said South Australians have a “long-established” preference for detached housing.
He says this has been demonstrated by recent industry research showing that capital values in this asset class have grown consistently since June 2016. According to CoreLogic, detached housing values increased by 3.1 per cent in the last 12 months, compared to a modest 0.3 per cent for 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 Mr McDonald.
“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 said 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.”