This article is from the Australian Property Journal archive
AUSTRALIA’S $3.5 trillion residential property market is expected to hand down over $400 billion worth of assets over the next 15 years, according to the Bankwest Financial Indicators Series report.
According to the report, a combination of rising property prices, an ageing population and high home ownership rates will combine to produce a “perfect storm” with record intergenerational wealth transfer or inheritance.
The report found veterans (aged 70 plus) and older baby boomers will start to pass away over the coming years and leave behind billions of dollars worth of property.
Bankwest Retail CEO Vittoria Shortt said the Inherited Housing Wealth Report was based on ABS census data and life expectancy figures and showed that $407 billion worth of housing assets is projected to be inherited by Australians over the next 15 years.
“One in ten homes owned by households will potentially be given away by 2025 which represents an unprecedented baton change in intergeneration wealth, the likes of which we have never seen before.
“The Veterans and Baby Boomers have ridden a rising tide of property prices over recent decades and are now sitting on housing assets worth around $1.5 to $2 trillion,” She added.
In 2009 there was an estimated $16 billion of housing inheritance and Shortt predicts this will increase by 93% to $31 billion a year by 2025. In the interest of conservative analysis, these projections are based on current property prices and do not model any future price increases.
The report revealed the capital cities likely to see the biggest gains from housing inheritance over the next 15 years was highest in Sydney ($113 billion), Melbourne ($86 billion), Brisbane ($33 billion) and Perth ($33 billion).
Outside of the capital cities the biggest inheritance is projected to be on Queensland’s Gold Coast ($12 billion) and the Hunter region of NSW ($11 billion), both popular retirement destinations.
Projected inherited housing wealth over the next 15 years amounts to around 12% of the value of total Australian household’s housing assets of $3.5 trillion.
Australian Property Journal
