Baby Boomers - born 1946-1965 - who have previously been our largest generation and a driving force in shaping Australia’s economy and society, are reaching retirement age.
The latest ABS figures show that 670,000 people intend to retire in the next 5 years, with 220,000 in the next 2 years.
Meanwhile, Millennials - born 1981-1995 - are due to soon overtake Baby Boomers to be Australia’s largest generation.
These are two key shifts in our demographic landscape and they spell big changes ahead for the formation of, and distribution within, our suburbs.
You see, as older generations age and new ones emerge, governments, businesses, and societies at large must adapt to changing needs and preferences.
From healthcare and education to workforce dynamics and retirement planning, each aspect of our lives is intricately linked to the age structure of our populations.
This is particularly interesting to look at from a property perspective as it helps to plan residential and commercial development to suit the generation most predominant in the area.
It also gives an insight into what amenities will be in the area - suburbs with a high density of children, for example, will be skewed towards child-friendly amenities and outdoor spaces to meet that demographic’s preferences.
In The Australian, Hari Hara Priya Kannan, a data scientist at The Demographics Group used ABS data to drill down into the suburbs that each generation dominates - and how their demographic landscape is changing.
Gen-Alpha: The babies
Age bracket: Born after 2018
Population size: Around 1.5 million (6% of the population)
Suburbs with the highest concentration: Strathnarin (Canberra), Tarneit-North (Melbourne) and Cobblebank (Strathtulloh)
Generation Alpha is the first generation to have their entire upbringing in the 21st century and are mostly lovely to be the children of Millennials, therefore following their settlement patterns.
Its population is most dense in Strathnarin in Canberra (14%) of its population, followed by Melbourne’s Tarneit-North and Cobblebank – Strathtulloh, where Gen Alphas make up 13% of the population.
Notably, all these suburbs are situated in the urban fringes, underscoring the prevailing trend among Millennials and their families as this generation lives with their parents.
Gen-Z: The students
Age bracket: Born 2000-2017
Population size: 6.4 million (around 1 in 4 people)
Suburbs with the highest concentration: Acton (Canberra), Duntroon (Canberra), St Lucia (Brisbane) and Clayton North - Notting Hill (Melbourne)
This generation is characterised by its education and career pursuits, heightened awareness of mental health issues, and a strong sense of environmental responsibility.
Gen-Z also experienced a boom in its population, growing by around 304,000 between 2017-2022, most notably in Canberra (14%), Queensland (6%) and Melbourne (5%).
Canberra’s Acton and Duntroon now have the highest proportion of resident Gen Z population at 89% and 72% respectively, likely due to the Defence Academies in the area.
This is followed by Brisbane’s St Lucia at 47% and Melbourne’s Clayton (North) – Notting Hill at 46%.
Hari Hara Priya Kannan explains that while this generation basically lives with their parents at present, demographic trends suggest we will experience a rising demand for purpose-built student accommodations in university precincts, as both the urban fringes and city centres appear to attract an increasing number of students.
Gen-Y or Millennials: The first-home buyers
Age bracket: Born 1982-1999
Population size: 5.6 million (22% of the population)
Suburbs with the highest concentration: Clyde North (Melbourne), Tarneit, Cobblebank – Strathtulloh (Melbourne), Rockbank (Melbourne), Box Hill – Nelson (Sydney), Marsden Park – Shanes Park (Sydney), and Schofields East (Sydney)
Gen-Y, also referred to as Millennials also experienced a population boom in 2017-2022 by around 242,000, particularly in Tasmania and Canberra, and are fast becoming the demographic with the largest population.
Millennials have played a pivotal role in driving population growth towards urban fringes in recent years, mainly due to this age group reaching the stage in their life where they are having and/or growing their family.
It’s this shift towards parenthood that has seen Millennials move from inner-city apartments to larger family homes on the urban fringes.
Melbourne’s Clyde North, Tarneit, Cobblebank – Strathtulloh, Rockbank, and Sydney’s Box Hill – Nelson, Marsden Park – Shanes Park, and Schofields East have experienced remarkable growth, with the Millennial cohort increasing by at least 200% in these areas.
Hari Hara Priya Kannan suggests we should expect to see the development of adequate infrastructure to support these suburbs and their population growth.
Improved transport links and facilities will be crucial for the success of these areas.
Gen-X: The upgraders
Age bracket: Born 1964-1981
Population size: 6.5 million (25% of the population)
Suburbs with the highest concentration: Iluka - Burns Beach (Perth), Fig Tree Pocket (Brisbane), Port Melbourne (Melbourne)
Growth of the Gen-X population was smaller 58,000 in the 5 years to 2022, and mostly located in Tasmania and Queensland due to the attractiveness of a better work-life balance and alternative culture.
Hari Hara Priya Kannan explains that the majority of this population has peaked in terms of their income, but are homeowners looking to upgrade their property while maintaining a young family and caring for older parents.
They are drawn to affluent suburbs with good school facilities and convenient access to aged care facilities, making these locations highly sought-after destinations for this cohort.
The highest concentrations of Gen Xers can be found in Perth’s Iluka – Burns Beach at 35%, Brisbane’s Fig Tree Pocket at 34%, and Melbourne’s Port Melbourne at 32%.
These areas are well known for their large and extravagant properties, making them ideal destinations for property upgraders within the Gen X demographic.
Baby boomers: The lifestyle seekers
Age bracket: Born 1944-1963
Population size: 4.8 million (19% of the population)
Suburbs with the highest concentration: Tea Gardens – Hawks Nest (Sydney), Cooloola (Queensland coast) and Paynesville (Gippsland, Victoria)
The number of Baby Boomers dropped 4% in the 5 years to 2022, mostly in the Northern Territory and Canberra.
This post-war cohort has actively witnessed and contributed to social and cultural movements over the years, reshaping the definition of traditional working and the concept of retirement.
Younger Baby Boomers look for diverse lifestyles and experiences while caring for elderly parents and helping bring up their own grandchildren.
They are in no hurry to move into over 55 villages or retirement villages.
They’re not keen to downsize from their empty nester’s home.
Tea Gardens – Hawks Nest, located about two hours north of Sydney, has the highest proportion of Baby Boomers at 49%, closely followed by Cooloola near the Sunshine Coast in Queensland, at 47%.
In Victoria, Paynesville in the Gippsland Lakes is the top choice for Baby Boomers, with 44% of the population belonging to this generation.
Hari Hara Priya Kannan explains these regions are particularly attractive for this generation due to their emphasis on a relaxed lifestyle and living according to Hari Hara Priya Kannan.
Pre-boomers: The retirement living dwellers
Age bracket: Born before 1943
Population size: 1.1 million (4% of the population)
Suburbs with the highest concentration: Castle Hill (Sydney), Page (Canberra), Millbank - Avoca (Brisbane) and Lindisfarne - Rose Bay (Hobart)
Also known as the Silent Generation, pre-Boomers were on the front line for the Great Depression and World War II and have seen a 32% drop off in their population numbers over the 5 years to 2022 due to natural aging.
The remainder of the population is mostly living in retirement and aged care facilities with essential services nearby.
Approximately 1-in-5 pre-boomers live in Sydney’s Castle Hill, followed by Canberra’s Page which has a Pre-Boomer population of 14%, while Brisbane’s Millbank – Avoca and Hobart’s Lindisfarne – Rose Bay both have a Pre-Boomer representation of 12% each.
Change is coming…
The impending shift in Australia's demographic split will see a change in the future of our property landscape.
As Millennials move into the family formation stage of their lives they’ll want more space, an additional bedroom or two to bring up their kids and the ability to work from home - at least occasionally.
There is little doubt that Millennial knowledge workers will be working from home much more regularly in the future.
They will also value their neighbourhood – wanting to live in a "20-minute neighbourhood" where everything is within a short walk, drive or cycle from their home.
As Millennials move to dominate the population and major sections of the cities, particularly urban fringes, there will be a change and an upgrade of amenities and facilities in many suburbs to appeal to the needs of this soon-to-be dominant generation.
And with change comes a generational wealth transfer…
According to various studies and projections, Australia is set to witness an unprecedented transfer of wealth in the coming decades as a substantial amount of wealth is expected to gradually pass from the older baby boomers to their heirs, primarily Gen X and Millennial generations.
It is estimated that over $3 trillion will change hands within the next two decades, making it one of the most significant intergenerational wealth transfers in the country’s history.
This transfer of wealth, largely tied up in property and superannuation, will have profound implications for Australia's property market.
Baby Boomers have been the most prosperous generation in Australia's history.
They've benefited from a period of unprecedented economic growth, stable employment, and significant increases in property values.
As a result, they've accumulated substantial wealth, much of it tied up in the family home, and many own their homes outright – they were bought years ago and the mortgage has long been paid off.
Of course, this wealth transfer could exacerbate existing wealth inequalities.
Those with wealthy parents are likely to receive a larger inheritance, potentially widening the gap between the property 'haves' and 'have nots'.
This could lead to an even greater divide between property owners and renters.
In conclusion, the impending wealth transfer from the Baby Boomer generation will undoubtedly have significant effects on the Australian property market.
While the exact outcomes are uncertain and will depend on a variety of factors, it is clear that this demographic shift will shape the property market for years to come.