The housing market will see a huge shock in the next coming years as the 4 million Australian Baby Boomers start to retire. Research has shown that unlike their parents, the Baby Boomers are not looking at settling into their over 55's retirement housing estates, rather they are seeking to invest their money in property either for long term or holiday rentals. This will see a huge shift in the demographics of the sun, surf and holiday spots around the country. The high demand in these areas has already seen property prices rise dramatically, and the local infrastructure put under pressure.

For over 25 years the Baby Boomers have driven our property markets, and as they retire, this trend does not appear to be changing. It is estimated that the Baby Boomers currently make up 45% of the housing market, and this is predicted to rise to 50% in the next 10 years. In 10 years time, there will be over 150,000 Baby Boomers reaching retirement age.

Currently there are about 4.1 million Baby Boomers, which represents an increase of 60% from the generation before them (approx 2.4 million). What was built in the 1960's and 1970's to accommodate the Baby Boomers' parents, had to be upped by 60% to accommodate the Boomers. As the cycle goes on, the property demand will once again hinge on the Baby Boomers.

So what about the Empty Nesters? Stats show that once the children have left, they are looking at downsizing their home, but keeping within the same area - in a modern townhouse or new unit. Even if only 25% downsize, this will significantly impact our property market, creating a requirement for a further 20,000 to 30,000 density dwellings a year. Medium density townhouses will be in strong demand in Melbourne, as most Empty Nesters will not move into apartments. In turn, this will push up the value of townhouses.

So, if you want to outperform the property market over the next 10 years, invest with the Baby Boomers and Empty Nesters in mind!