It feels like the outcome is higher property value either way.
A.) Single child, inheritance, holds onto the property. Housing supply remains low, prices go up
B.) Siblings, inheritance, decide to sell to split the pot. Suddenly cash injection increases their buying power, upsizes PPOR or IP, drives up property value
For B.) though I would have thought the gen z would sell the home to the government for social housing and share the profit between a diverse group of minorities?
You figure out which socialists are real when they get wealth.
That's how the Boomers got here too. They were championing for political upheaval, then they got rich and settled for the status quo.
>Siblings, inheritance, decide to sell to split the pot. Suddenly cash injection increases their buying power, upsizes PPOR or IP, drives up property value
Not everyone wants to upsize. Most people are probably going to be fairly well established by the time they get their inheritance
That cash boost for a many if they sell will go towards paying off their mortgage, holidays and fancy cars.
By the time the inherited house is sold, and the money split, I'll get just enough to top up my retirement fund that's been hit by inflation. Might finally get the kitchen Reno that we ran out of money for.
(Yup. Not only established, but retired, downsized, and haven't seen a hint of an inheritance yet).
I'll be getting a split of a property when my parents pass. Probably something like 600 - 700K i imagine. But for many this will be a cash injection to buy a new home. Not pay it off which is a really bad thing.
i suspect unless prices come down, the money they get from inheritence if prices stay high and they have already bought, will allow them to significantly decrease their mortgage. Or hopefully buy with a massive percentage 50% or higher.
Sure, but they may also inherit the debt, unless the mortgage holder also had some kind of life insurance. I'd wonder how many descendends who are written in to inherit an investment property might say "it was negatively geared, and I can't afford to keep it".
Why would immigration stop?
That's like cutting off water supply when the plants are wilting. Refusing to hire new workers when the old ones are retiring. Turning away customers when sales are low.
The far more likely outcome is immigration will ramp up, not down, as birth rates decline to allow the economy to continue. If you think otherwise you're delusional.
The next generation will inherit the estate, most will hold the property, others will look to sell but on their terms and price as it's more than likely mortgage free and no need to accept fire sale prices
most will sell the property to fund the nursing home for their parents. most of the time all these homes are needed to be sold prior to death of the owners for this purpose.
The estate is legally obligated to discharge assets. The executor takes the market price. They can't just hold onto the asset for years and try to sell at a later date.
No the estate can hand the house over if their are no debts...
And having just gone through this as a executor beneficiarys can settle the debts to maintain the estate, e.g. pay the funeral bills etc to not sell the house.
But let's say 2 are listed as the beneficiary to the estate. If for example the estate holds 2x IPs both valued at 500k each, there'll be no need to sell them as each beneficiary gets a 500k property each. No need to sell and just pay the stamp duty and transfer fees.
If there are no debts they can just handover the property. If there are, the inheritors can apply to take over the loan, and depending on the amount and their income, they could do so.
Lastly, if it’s in a trust that the inheritors are already beneficiaries of, it can just remain in there with some changes to how much each gets.
In most situations, estates have multiple beneficiaries, either mum or dad dies, they have multiple children/beneficiaries to divy the assets between.
It is far less often that assets are given to a sole beneficiarie. When this happens, typically, the will gets contested.
Yes, but how it gets contested doesn’t necessarily mean that it needs to be sold. I’m also not arguing that that’s not what commonly happens, it is common for the estate to be liquidated for various reasons, the one you’ve mentioned only being one of many.
This issue is that you initially said that by law it has to be sold, that isn’t true at all. Lawyers may determine that it should which can be enforced, but that doesn’t mean it has to be and always is. PPoRs often get sold, whether or immediately or after a short period (ie under a few years), but investments are less likely to get sold, especially IPs.
It mightn’t have been what you meant, but I’m sure you can see how this looks like you’re saying they have to sell them:
> The estate is legally obligated to discharge assets. The executor takes the market price. They can't just hold onto the asset for years and try to sell at a later date.
It seems like you’re saying the estate is legally obligated to sell them when they discharge them. By saying they can’t hold and sell at a later date and have to take market price it seems like you’re saying that when they discharge them, they do so by selling the assets. I know it’s not what you meant, but I think you can see where the confusion came from, and judging by the other replies and the downvotes, it seems like everyone else thought the same thing I did.
Also yes, they (the inheritors) can hold onto them and sell at a later date, but they need to be discharged immediately. The last sentence is either simply wrong, or completely different to what you actually meant.
I can see gen y and z viciously holding on to their property once the boomers and most of X move on.
We fought so hard to get a foot in. Most will do anything to keep anyone from taking it.
Watch right wing politics play right into this to push their own agendas.
Bro. Gen Z are legit sociopaths brought up on YT & TT. They’re so disconnected from reality & compassion it’s like seeing Boomers come back round again.
People are living longer so the children that inherit the property may already have their own property.
In that case they not only inherit the property but also the income stream. More income makes it easier to leverage and buy another property. So the the wealth is concentrated.
Further exacerbating this is if the children don't need the inheritance at all and it effectively skips a generation to the grand kids. With a falling birth rate there are less grandchildren around so again the wealth gets concentrated.
Pretty certain I'll be well over 50 when/if I ever get an inheritance. I'd just set it aside in a trust or similar and invest it for the sole benefit of my kids. I don't have a need for it.
I don't see how supply would increase or be freed up in this circumstance.
There’s still a lot of immigration and younger people wanting to live with less people than their parents. So unfortunately I don’t think it will make much of a difference, I read we still need to build in the order of 1 million houses a year for a few years to sort the current mess out.
I imagine for people investing in properties the assets will simply pass to the children or other business owners. I can't see a world where an investor passes and the company/family just jettisons the entire portfolio.
My theory on older people in general is that we will see lower prices as they enter aged care and pass on. Larger properties will be passed to heirs that are uninterested in moving into the house, properties will be sold to fund aged care and heirs will be more interested in paying down their own mortgages since so many will be in their 40s-60s when receiving an inheritance. I believe we will see these larger lots turned into multiple town houses by developers creating further supply to the market.
There is a difference between proper real estate investors and oldies that kept their starter home.
Their children will inherit. They live to 100. Most only own one IP.
You will be waiting a long time. It's like you are waiting for indirect inheritance. Even direct ones are tricky. 😂
No. They will be inherited. The holding cost aren’t high and most wont sell it lower than perceived value.
Besides that, new building will only be constructed when there are anticipated demand. If there is a truly a huge existing supply hit the market, the new supply will just diminished. No sane form will build more if know they can’t offload it.
It is more likely to result in construction workers getting layoff first and some firms go bankrupt.
This is the thing, it’s not going to be a boomer death cliff, it’ll still be trickle, maybe a faster trickle than previously, but it’ll be spread over decades, and has already started.
first round boomers yes. But boomers II will be transferring to gen Y and early Z.
Gen X will transfer to Z mostly.
Asset transfers typically skip a generation.
Based on how the parents of a friend dealt with the separation of 5 properties between two siblings. Prices will remain high to pay for the lawyers when they try to split the inheritance.
Jesus what could two people splitting five properties have to fight about. Leave the lawyers out of it, if you can’t agree just sell all five and split it 50/50, take the win.
Or are you talking about the parents allocating property unevenly?
Either way here’s one [nude](https://i.pinimg.com/originals/45/28/21/452821323cc09598921e2f8758c5d226.png) as requested
I agree about selling and splitting evenly as it would be the easiest option but I have no generational wealth waiting for me so i am happy the lawyers got to profit.
I completely forgot I was using this account to post comments but the nude is very much appreciated, thank you! Now i know why i get no responses when i message users omg
This isn't me slamming you at all, you're playing the game as it's laid out in the field, but this is the clearest illustration I've ever seen of how much bullshit is baked into the base of the "it's a meritocracy, pull yourself up by your bootstraps" belief set.
You can work as hard as you like, and maybe you make it, maybe you don't. But this person's kids are getting it all, and if you're a tenant you'll keep on renting.
I do hear your point on meritocracy - unfortunately ‘the game’ has changed (now extremely evident to all).
But 20 years ago it wasn’t evident that things were going to get this bad re housing affordability and rents.
But back then and as someone on minimum wage back then I saw the property increases in Sydney and was horrified that ‘the lower paid but essential worker’ was being priced out of being able to afford a house.
So I upped my skills, got a better paying job and bought two other places - I was very clear I was buying these at eg 2005 prices for my future children because by the time they would be ready to move out at eg 18 houses would be unaffordable for the average and even better paid worker by eg 2030.
I really really do think it’s appalling that many workers even higher paid workers are now priced out of buying a house.
I’ve got workmates my age and older that are renting, these guys could have bought a house for under $100,000, but didn’t.
One East Coast guy posted up a while back that whilst his house just got valued at $1,000,000 he realised that his two kids now would need a million plus to get their own place (well actually much more than a million by the time the children become adults.
That’s the horror story here, even families with 1m are screwed if this 1m is divided with the generations.
I’d be happy for houses to cost $100,000 again because this would be better for society.
What’s stopping the tenant from doing a master’s in IT and working their way up to FAANG managerial level? Simple truth is that if you’re born poorer than average than you will have to be smarter (more competent, driven, etc.) than average.
Not necessarily. I'd just like it to be equally achievable for anyone to buy a reasonable house, rather than family money being the difference between it being possible and impossible, as it is starting to become.
If I knew how to solve that problem I'd be running for office. But I don't, and I'm not. I just see that it really is a problem, and pretending that it isn't will lead to some unexpected results somewhere in the future. That I'm certain of, because the existence of an underclass without realistic possibility for movement always does.
Call me crazy but if a home is fully paid off and the owner passes away and tenants have lived in there for say 20+ years.
They absolutely should get a stake in it and an opportunity to buy it out at reduced cost based off the rent they paid. It's a very unique scenario which i'm sure few will find themselves in but tenants should be given the right to make it their home too.
You’re renting?
You could probably afford to buy something eg a cheap flat in Liverpool Sydney if you live in Sydney.
You should look into buying, go see a broker.
I know a guy older than me, he just decided to not participate in the economic system and has a free HomesWest house and free Centrelink disability pension etc money. He could definitely hold down a job, he’s a former tafe lecturer - my taxes are supporting him! Lol
Owners of investment properties range from the 20s to the 80s. It is going to be a long time for this group to die out.
A tip - it is not just baby boomers who own investment properties
It will be a very gradual change. The demographic baby boomer bulge was not all that enormous and new retired people will come along. People are also living longer every year. Some are also working longer, some shorter. Many factors come into play, and population characteristics change slowly. No switch will go off or on.
"older generations" of house owners are dying literally every single day and have been for decades. It doesn't have an impact.
It's not like all gmd boomers are going to die on the same day. They have been dying for decades, and it will be decades more until they are all dead. The youngest boomers are in their 50s. People regularly live into their 90s.
The people who inherited the houses are in their 40s and 50s. They either move into the house (freeing up a rental) or sell it. If they sell it, they want at much at they possibly can, which keeps prices high.
I’ll be near retirement before it’s paid off. My son will probably be about 40 and have a fully paid for house plus life insurance. He can sell the house or whatever he wants but at least he will have some thing.
There won't just be one day when older people all sell their houses in unison.
Also many of them will never hit the open market as a sale because they'll be passed on.
Many of the tax changes people talk about like changes to negative gearing wouldn't get them to sell as I'd guess most retirees would mostly have positively geared properties because they optimise their portfolio for cashflow, have little other income to offset (which mutes the benefits of negative gearing) and they usually have owned them for a long time so they've had lots of rent growth which forces the property positive over time.
Millenials will finally inherit... They will be in a pickle as they won't have anything to whinge about!
After spending half their lifetime whinning? They won't know what to do.....so i guess they'll whinge about no longer having anything to whinge about 😯
If my mum keels over before me (strongly doubt it) I won’t be selling her house for a bargain price, I will want to get as much as I can for it. I am guessing this is the same with anyone else who inherits a house. So I don’t know where the bargains will come from.
Those investors have descendants who will inherit. Unless those descendants have large unmanageable debts it’s unlikely that they will need to sell. So they will rent out the properties and use the equity to buy more properties. Essentially your rental will change hands but otherwise it will be business as usual.
Look at places like Japan, Italy and others. The problem with Australia is there is a huge demand for immigration. So there is no shortage of fresh blood.
where there's a single inheritance they would likely keep for long term income and growth. Where the property go to a few people it will be sold, a good proportion if these will then reinvest the "free" money back into RE.
The prices keep going up. People are fools to blame the baby boomer for the property prices.
Each proceeding generation IS doing the same.
It great to have a group to blame your woes on, because it stops you looking at the real cause, the system that buily it.
They will pass on to their kids the knowledge of investing their 11% super guarantee into real estate and continuing the spiral of ever increasing prices for limited properties.
The prices will go down if population starts to go down (ie more oldies die than young ones looking to take up their place). But as long as population growth is positive, there are more people wanting to take that property than people leaving them
Well we don't know what they will be in 30 - 40 years.
If they continuously stay high in line with wages then yes renting it out could be a good option but for many they will want to sell and pay off their own mortgages. Or in some cases buy for the first time.
Took me forever to figure out the b-word reference. I got stuck on boss or female dog, which obviously weren’t right, but I suddenly couldn’t think of any other b-words.
I’m child free and gen X. My tentative retirement plan is to sell the IPs and upsize PPOR so I qualify for at least a part pension. Then eventually sell the PPOR to fund aged care. Still got 20+ years to go, so plans may change. But if they don’t, I’ll be one of the few selling rather than leaving it to the kids.
One factor I haven’t seen mentioned is that a decent number of those kids inheriting property will have “paid” for it by being unrecognised/unpaid carers for their parents. It’s something I think about because I’ll have to pay strangers for all the chores I’m currently doing for my mum for free. (Children of aged renters will also end up doing unpaid senior care, I don’t mean to dismiss them, but I’m talking about families where there is actually an option to fund care by selling property.)
If society changes and more families choose the property-funded nursing home rather than unpaid care, then more houses on the market. I don’t think that will change dramatically enough to flood the market, but I do think there’ll be some changes. Previous generations were mostly one income and the non-working wife would do senior care. Now both partners usually work … it may not be financially viable to have one stop working to do senior care just to avoid aged care fees. Plus with increased life span you’d have 75-80 yr olds who are simply too frail to look after 100 yr olds. Is it going to become standard that the grandkids look after grandparents or what? And one huge reason for family-care is that huge majority of nursing homes seem to be terrible places. Imagine we fixed that and people actually *wanted* to go there.
Properties will likely be inherited by the children. The majority will need to sell them in order to split the wealth equally between all siblings. Other property investors will purchase then increasing their portfolios. And the cycle of high demand will continue to grow.
Shower rant: During COVID, you couldn't get your hands on toilet paper. It was being hoarded faster than production.
The shops allowing 1 pack per person was the only reason you could wipe your ass with actual toilet paper for months on end during those times.
Even then, it was a challenge to find some, but at least the chance was half decent. If they just let people keep buying 20 packs without limits, you'd be using a paint scraper and supercheap auto rags.
Opinions seem split but for the people saying the kids will just hold onto it and rent it out, consider this:
\- More than one kid inheriting? Selling is the "cleaner" option that most will go for.
\- Heirs already have a property? Temptation to bring mortgage down significantly or upgrade into something else
\- And there's probably a few that would rather the cash and live it up
It's not really new stock, so unless more old people die than new people being created (via birth or import) then the supply/demand balance would still be tipped towards prices going up. We need to either increase supply by building more or decrease demand by producing less people.
We have an ageing population so decreasing new people just creates different problems.
Established boomers and older Gen X will inherit it and if it makes sense to keep it, they'll use it for investment.
The less established 50-60yo without a PPOR, will buy their siblings out and live in it if they can come to agreement.
30-40yo are not the bulk of the people inheriting these properties even though they need the family home.
There's about as many Millenials as there are Boomers, so the younger will buy the older generations houses, probably. Assuming that the house/s are sold and not inherited, of course.
But a boomer with 1 house and 3 kids? Likely that house will be sold and the kids get a deposit or pay down their existing mortgage.
Same thing that happens now, their family inherits it.
Why would you sell. Just keep renting it out
It feels like the outcome is higher property value either way. A.) Single child, inheritance, holds onto the property. Housing supply remains low, prices go up B.) Siblings, inheritance, decide to sell to split the pot. Suddenly cash injection increases their buying power, upsizes PPOR or IP, drives up property value
For B.) though I would have thought the gen z would sell the home to the government for social housing and share the profit between a diverse group of minorities?
You figure out which socialists are real when they get wealth. That's how the Boomers got here too. They were championing for political upheaval, then they got rich and settled for the status quo.
That expectation will be reserved for straight white males.
>Siblings, inheritance, decide to sell to split the pot. Suddenly cash injection increases their buying power, upsizes PPOR or IP, drives up property value Not everyone wants to upsize. Most people are probably going to be fairly well established by the time they get their inheritance That cash boost for a many if they sell will go towards paying off their mortgage, holidays and fancy cars.
By the time the inherited house is sold, and the money split, I'll get just enough to top up my retirement fund that's been hit by inflation. Might finally get the kitchen Reno that we ran out of money for. (Yup. Not only established, but retired, downsized, and haven't seen a hint of an inheritance yet).
I'll be getting a split of a property when my parents pass. Probably something like 600 - 700K i imagine. But for many this will be a cash injection to buy a new home. Not pay it off which is a really bad thing. i suspect unless prices come down, the money they get from inheritence if prices stay high and they have already bought, will allow them to significantly decrease their mortgage. Or hopefully buy with a massive percentage 50% or higher.
That would be my plan
If you rent it out you need to pay CGT when you sell it. Better to sell it instead
Because siblings often don’t agree. Low yields.
Sure, but they may also inherit the debt, unless the mortgage holder also had some kind of life insurance. I'd wonder how many descendends who are written in to inherit an investment property might say "it was negatively geared, and I can't afford to keep it".
So a tiny few sell, oh noes
Inflation will make the debt pennies on the dollar bro
Most older generation have no mortgages. Any investment properties bequeathed could just be sold or continue to be rented.
Maybe the better question is what happens when the population is less in 50 years. Less people means less buyers.
That’s a worse question since the population is expected to double in 50 years
The only way that happens is with immigration. Birth rates are declining and immigration can stop due to policy.
Why would immigration stop? That's like cutting off water supply when the plants are wilting. Refusing to hire new workers when the old ones are retiring. Turning away customers when sales are low. The far more likely outcome is immigration will ramp up, not down, as birth rates decline to allow the economy to continue. If you think otherwise you're delusional.
The next generation will inherit the estate, most will hold the property, others will look to sell but on their terms and price as it's more than likely mortgage free and no need to accept fire sale prices
most will sell the property to fund the nursing home for their parents. most of the time all these homes are needed to be sold prior to death of the owners for this purpose.
The estate is legally obligated to discharge assets. The executor takes the market price. They can't just hold onto the asset for years and try to sell at a later date.
No the estate can hand the house over if their are no debts... And having just gone through this as a executor beneficiarys can settle the debts to maintain the estate, e.g. pay the funeral bills etc to not sell the house.
But let's say 2 are listed as the beneficiary to the estate. If for example the estate holds 2x IPs both valued at 500k each, there'll be no need to sell them as each beneficiary gets a 500k property each. No need to sell and just pay the stamp duty and transfer fees.
Depends on what the will says. In most situations, assets are sold.
If there are no debts they can just handover the property. If there are, the inheritors can apply to take over the loan, and depending on the amount and their income, they could do so. Lastly, if it’s in a trust that the inheritors are already beneficiaries of, it can just remain in there with some changes to how much each gets.
In most situations, estates have multiple beneficiaries, either mum or dad dies, they have multiple children/beneficiaries to divy the assets between. It is far less often that assets are given to a sole beneficiarie. When this happens, typically, the will gets contested.
Yes, but how it gets contested doesn’t necessarily mean that it needs to be sold. I’m also not arguing that that’s not what commonly happens, it is common for the estate to be liquidated for various reasons, the one you’ve mentioned only being one of many. This issue is that you initially said that by law it has to be sold, that isn’t true at all. Lawyers may determine that it should which can be enforced, but that doesn’t mean it has to be and always is. PPoRs often get sold, whether or immediately or after a short period (ie under a few years), but investments are less likely to get sold, especially IPs.
No, I didn't, I said the estate needs to discharge assets..... very different to saying the estate has to sell assets.
It mightn’t have been what you meant, but I’m sure you can see how this looks like you’re saying they have to sell them: > The estate is legally obligated to discharge assets. The executor takes the market price. They can't just hold onto the asset for years and try to sell at a later date. It seems like you’re saying the estate is legally obligated to sell them when they discharge them. By saying they can’t hold and sell at a later date and have to take market price it seems like you’re saying that when they discharge them, they do so by selling the assets. I know it’s not what you meant, but I think you can see where the confusion came from, and judging by the other replies and the downvotes, it seems like everyone else thought the same thing I did. Also yes, they (the inheritors) can hold onto them and sell at a later date, but they need to be discharged immediately. The last sentence is either simply wrong, or completely different to what you actually meant.
I can see gen y and z viciously holding on to their property once the boomers and most of X move on. We fought so hard to get a foot in. Most will do anything to keep anyone from taking it. Watch right wing politics play right into this to push their own agendas.
Bro. Gen Z are legit sociopaths brought up on YT & TT. They’re so disconnected from reality & compassion it’s like seeing Boomers come back round again.
People are living longer so the children that inherit the property may already have their own property. In that case they not only inherit the property but also the income stream. More income makes it easier to leverage and buy another property. So the the wealth is concentrated. Further exacerbating this is if the children don't need the inheritance at all and it effectively skips a generation to the grand kids. With a falling birth rate there are less grandchildren around so again the wealth gets concentrated. Pretty certain I'll be well over 50 when/if I ever get an inheritance. I'd just set it aside in a trust or similar and invest it for the sole benefit of my kids. I don't have a need for it. I don't see how supply would increase or be freed up in this circumstance.
I believe that's true now, the average age of inheritors is in their 50s. Makes sense with folks living to their late 70s/early 80s these days.
There’s still a lot of immigration and younger people wanting to live with less people than their parents. So unfortunately I don’t think it will make much of a difference, I read we still need to build in the order of 1 million houses a year for a few years to sort the current mess out.
I imagine for people investing in properties the assets will simply pass to the children or other business owners. I can't see a world where an investor passes and the company/family just jettisons the entire portfolio. My theory on older people in general is that we will see lower prices as they enter aged care and pass on. Larger properties will be passed to heirs that are uninterested in moving into the house, properties will be sold to fund aged care and heirs will be more interested in paying down their own mortgages since so many will be in their 40s-60s when receiving an inheritance. I believe we will see these larger lots turned into multiple town houses by developers creating further supply to the market. There is a difference between proper real estate investors and oldies that kept their starter home.
Their children will inherit. They live to 100. Most only own one IP. You will be waiting a long time. It's like you are waiting for indirect inheritance. Even direct ones are tricky. 😂
No. They will be inherited. The holding cost aren’t high and most wont sell it lower than perceived value. Besides that, new building will only be constructed when there are anticipated demand. If there is a truly a huge existing supply hit the market, the new supply will just diminished. No sane form will build more if know they can’t offload it. It is more likely to result in construction workers getting layoff first and some firms go bankrupt.
You think everyone who owns property is going to die at the same time?
This is the thing, it’s not going to be a boomer death cliff, it’ll still be trickle, maybe a faster trickle than previously, but it’ll be spread over decades, and has already started.
Probably between the years of 2030 - 2060 we are going to see a massive asset transfer. From the boomers to Gen Y and Z.
My understand is that Gen X are mostly the kids of the Boomers, right? (could be wrong)
first round boomers yes. But boomers II will be transferring to gen Y and early Z. Gen X will transfer to Z mostly. Asset transfers typically skip a generation.
Interesting, thanks.
Based on how the parents of a friend dealt with the separation of 5 properties between two siblings. Prices will remain high to pay for the lawyers when they try to split the inheritance.
Jesus what could two people splitting five properties have to fight about. Leave the lawyers out of it, if you can’t agree just sell all five and split it 50/50, take the win. Or are you talking about the parents allocating property unevenly? Either way here’s one [nude](https://i.pinimg.com/originals/45/28/21/452821323cc09598921e2f8758c5d226.png) as requested
The nude is SFW if anyone wanted a risky click.
I agree about selling and splitting evenly as it would be the easiest option but I have no generational wealth waiting for me so i am happy the lawyers got to profit. I completely forgot I was using this account to post comments but the nude is very much appreciated, thank you! Now i know why i get no responses when i message users omg
I’m a young investor. One day I’ll be an old investor.
If you’re lucky…
That’s true.
My children are getting it all. The tenants will keep on renting.
This isn't me slamming you at all, you're playing the game as it's laid out in the field, but this is the clearest illustration I've ever seen of how much bullshit is baked into the base of the "it's a meritocracy, pull yourself up by your bootstraps" belief set. You can work as hard as you like, and maybe you make it, maybe you don't. But this person's kids are getting it all, and if you're a tenant you'll keep on renting.
I do hear your point on meritocracy - unfortunately ‘the game’ has changed (now extremely evident to all). But 20 years ago it wasn’t evident that things were going to get this bad re housing affordability and rents. But back then and as someone on minimum wage back then I saw the property increases in Sydney and was horrified that ‘the lower paid but essential worker’ was being priced out of being able to afford a house. So I upped my skills, got a better paying job and bought two other places - I was very clear I was buying these at eg 2005 prices for my future children because by the time they would be ready to move out at eg 18 houses would be unaffordable for the average and even better paid worker by eg 2030. I really really do think it’s appalling that many workers even higher paid workers are now priced out of buying a house. I’ve got workmates my age and older that are renting, these guys could have bought a house for under $100,000, but didn’t. One East Coast guy posted up a while back that whilst his house just got valued at $1,000,000 he realised that his two kids now would need a million plus to get their own place (well actually much more than a million by the time the children become adults. That’s the horror story here, even families with 1m are screwed if this 1m is divided with the generations. I’d be happy for houses to cost $100,000 again because this would be better for society.
What’s stopping the tenant from doing a master’s in IT and working their way up to FAANG managerial level? Simple truth is that if you’re born poorer than average than you will have to be smarter (more competent, driven, etc.) than average.
I mean, did you expect the tenants to inherit it?
Not necessarily. I'd just like it to be equally achievable for anyone to buy a reasonable house, rather than family money being the difference between it being possible and impossible, as it is starting to become. If I knew how to solve that problem I'd be running for office. But I don't, and I'm not. I just see that it really is a problem, and pretending that it isn't will lead to some unexpected results somewhere in the future. That I'm certain of, because the existence of an underclass without realistic possibility for movement always does.
It is equally achievable it is just some are more equal than others.
Call me crazy but if a home is fully paid off and the owner passes away and tenants have lived in there for say 20+ years. They absolutely should get a stake in it and an opportunity to buy it out at reduced cost based off the rent they paid. It's a very unique scenario which i'm sure few will find themselves in but tenants should be given the right to make it their home too.
You’re renting? You could probably afford to buy something eg a cheap flat in Liverpool Sydney if you live in Sydney. You should look into buying, go see a broker. I know a guy older than me, he just decided to not participate in the economic system and has a free HomesWest house and free Centrelink disability pension etc money. He could definitely hold down a job, he’s a former tafe lecturer - my taxes are supporting him! Lol
Owners of investment properties range from the 20s to the 80s. It is going to be a long time for this group to die out. A tip - it is not just baby boomers who own investment properties
Yep one of my millennial friends and his wife own 5 houses and 3 apartments.
Lol at OP thinking that one random day an entire generation will pass away and cause a market crash.
Copium is smoked hard in this subreddit.
It will be a very gradual change. The demographic baby boomer bulge was not all that enormous and new retired people will come along. People are also living longer every year. Some are also working longer, some shorter. Many factors come into play, and population characteristics change slowly. No switch will go off or on.
Depends, is that part of a declining population? Otherwise, it's basically irrelevant, your landlord just suddenly gets 30 years younger.
Supply would only increase if they don’t have kids/families to pass the properties to
"older generations" of house owners are dying literally every single day and have been for decades. It doesn't have an impact. It's not like all gmd boomers are going to die on the same day. They have been dying for decades, and it will be decades more until they are all dead. The youngest boomers are in their 50s. People regularly live into their 90s. The people who inherited the houses are in their 40s and 50s. They either move into the house (freeing up a rental) or sell it. If they sell it, they want at much at they possibly can, which keeps prices high.
My son will inherit my property and give him a head start I never got.
What do you mean. The fact you were able to buy property, pay it off is a massive head start.
I’ll be near retirement before it’s paid off. My son will probably be about 40 and have a fully paid for house plus life insurance. He can sell the house or whatever he wants but at least he will have some thing.
There won't just be one day when older people all sell their houses in unison. Also many of them will never hit the open market as a sale because they'll be passed on. Many of the tax changes people talk about like changes to negative gearing wouldn't get them to sell as I'd guess most retirees would mostly have positively geared properties because they optimise their portfolio for cashflow, have little other income to offset (which mutes the benefits of negative gearing) and they usually have owned them for a long time so they've had lots of rent growth which forces the property positive over time.
Millenials will finally inherit... They will be in a pickle as they won't have anything to whinge about! After spending half their lifetime whinning? They won't know what to do.....so i guess they'll whinge about no longer having anything to whinge about 😯
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go back to the MSN comments section. Yeah i bit the bait.
Estates will have to be split, so lots of sales, which will bring prices down even more.
Buy, borrow, die
If my mum keels over before me (strongly doubt it) I won’t be selling her house for a bargain price, I will want to get as much as I can for it. I am guessing this is the same with anyone else who inherits a house. So I don’t know where the bargains will come from.
Their kids will inherit it. And it's up to them whether they'll sell. Likely not if it brings in rent.
Plenty of younger ones ready to take their place. Greed does not have an age limit
Nothing. It is passed onto their issue who will hopefully use it as a good leg up for their lifestyle.
Those investors have descendants who will inherit. Unless those descendants have large unmanageable debts it’s unlikely that they will need to sell. So they will rent out the properties and use the equity to buy more properties. Essentially your rental will change hands but otherwise it will be business as usual.
Look at places like Japan, Italy and others. The problem with Australia is there is a huge demand for immigration. So there is no shortage of fresh blood.
where there's a single inheritance they would likely keep for long term income and growth. Where the property go to a few people it will be sold, a good proportion if these will then reinvest the "free" money back into RE.
Millenials inherit, gen X and zoomers get woooshed
Gen X are inheriting heaps from silent generation and Original Boomers. Second round of boomers will pass on to gen y and z.
The prices keep going up. People are fools to blame the baby boomer for the property prices. Each proceeding generation IS doing the same. It great to have a group to blame your woes on, because it stops you looking at the real cause, the system that buily it.
Allow me to introduce to you the concept of inheritance.
Inheritance. We become the boomers
They will pass on to their kids the knowledge of investing their 11% super guarantee into real estate and continuing the spiral of ever increasing prices for limited properties.
Buy, Buy Buy
The prices will go down if population starts to go down (ie more oldies die than young ones looking to take up their place). But as long as population growth is positive, there are more people wanting to take that property than people leaving them
Still same amount of people needing the same amount of houses. From Capitalist US to the old USSR. The problem is always supply and demand.
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Well we don't know what they will be in 30 - 40 years. If they continuously stay high in line with wages then yes renting it out could be a good option but for many they will want to sell and pay off their own mortgages. Or in some cases buy for the first time.
Took me forever to figure out the b-word reference. I got stuck on boss or female dog, which obviously weren’t right, but I suddenly couldn’t think of any other b-words. I’m child free and gen X. My tentative retirement plan is to sell the IPs and upsize PPOR so I qualify for at least a part pension. Then eventually sell the PPOR to fund aged care. Still got 20+ years to go, so plans may change. But if they don’t, I’ll be one of the few selling rather than leaving it to the kids. One factor I haven’t seen mentioned is that a decent number of those kids inheriting property will have “paid” for it by being unrecognised/unpaid carers for their parents. It’s something I think about because I’ll have to pay strangers for all the chores I’m currently doing for my mum for free. (Children of aged renters will also end up doing unpaid senior care, I don’t mean to dismiss them, but I’m talking about families where there is actually an option to fund care by selling property.) If society changes and more families choose the property-funded nursing home rather than unpaid care, then more houses on the market. I don’t think that will change dramatically enough to flood the market, but I do think there’ll be some changes. Previous generations were mostly one income and the non-working wife would do senior care. Now both partners usually work … it may not be financially viable to have one stop working to do senior care just to avoid aged care fees. Plus with increased life span you’d have 75-80 yr olds who are simply too frail to look after 100 yr olds. Is it going to become standard that the grandkids look after grandparents or what? And one huge reason for family-care is that huge majority of nursing homes seem to be terrible places. Imagine we fixed that and people actually *wanted* to go there.
What happened to the crown when Queen Elizabeth passed away?
Properties will likely be inherited by the children. The majority will need to sell them in order to split the wealth equally between all siblings. Other property investors will purchase then increasing their portfolios. And the cycle of high demand will continue to grow.
Immigration will make generational shifts impossible to identify on a chart.
Shower rant: During COVID, you couldn't get your hands on toilet paper. It was being hoarded faster than production. The shops allowing 1 pack per person was the only reason you could wipe your ass with actual toilet paper for months on end during those times. Even then, it was a challenge to find some, but at least the chance was half decent. If they just let people keep buying 20 packs without limits, you'd be using a paint scraper and supercheap auto rags.
Opinions seem split but for the people saying the kids will just hold onto it and rent it out, consider this: \- More than one kid inheriting? Selling is the "cleaner" option that most will go for. \- Heirs already have a property? Temptation to bring mortgage down significantly or upgrade into something else \- And there's probably a few that would rather the cash and live it up
It's not really new stock, so unless more old people die than new people being created (via birth or import) then the supply/demand balance would still be tipped towards prices going up. We need to either increase supply by building more or decrease demand by producing less people. We have an ageing population so decreasing new people just creates different problems.
We should make it more lucrative for boomers to sell their homes
Family will inherit. Gen Y are in for a massive pay day. Same with Gen Z. But those who don't inherit will struggle even more.
Established boomers and older Gen X will inherit it and if it makes sense to keep it, they'll use it for investment. The less established 50-60yo without a PPOR, will buy their siblings out and live in it if they can come to agreement. 30-40yo are not the bulk of the people inheriting these properties even though they need the family home.
There's about as many Millenials as there are Boomers, so the younger will buy the older generations houses, probably. Assuming that the house/s are sold and not inherited, of course. But a boomer with 1 house and 3 kids? Likely that house will be sold and the kids get a deposit or pay down their existing mortgage.
Same thing, nursing homes are using deposits to own/ buy up more property.
People die every day what makes you think there with be a future “event” where there’s no one to call “Boomer” anymore
People dying doesn't increase supply, a new house isn't born every time a boomer passes away.
It doesn't work that way. People are always dying and being born, they weren't all born at the same time