Property investment articles

New stages in the life cycle

Posted on Thursday, February 05 2009 at 2:04 PM

There are other ways of looking at the market for property other than the preferences and peccadilloes of baby boomers, Generation Xers and Generation Ys. It’s called life cycle segmentation and here are the new segments and their property traits.

by Bernard Salt

It’s not just baby boomers and Generations X and Y that control the demand for specific types of properties...

0-12 Childhood

Quite a popular concept these days with the baby blip now delivering 265,000 babies per year into the Australian nation. This figure is up from 220,000 in 2001. I refuse to call this blip a boom until it has been sustained for a decade. Suddenly there’s demand for affordable three-bedroom brick veneer dwellings on the edge of town.

13-18 Teenagers

This is a new but nonetheless primitive species first spotted soon after the Second World War. They’re incapable of buying residential property but nevertheless exert some influence of actual purchasers. They blossom in McMansions where they can be safely contained within their own quarters.

19-23 Students

An exciting subspecies of the student stage in the life cycle has only recently been discovered. It’s the 19-year-old Gapper, so named for the gap year they inject between secondary and tertiary education. Students live at home where they enjoy free board, free meals, free laundry and free access to the family car. They’re also known as KIPPERS: kids in parents’ pockets eroding retirement savings. Some students are increasingly living in dedicated student accommodation near universities.

24-28 Swingles

They’re hip. They’re hot. They’re single. They’re the grooviest, the most connected, the most educated generation known to mankind. Many live at home continuing to enjoy the freedoms and the freebies that come from living with mum and dad. Don’t expect the swingles to stump up for a mortgage because they’re perennially broke. Or, more accurately, they’re saving for important mind-expanding travel and electronic gadgetry and fashion clothing and eating out. They don’t have time for boring ‘property’ – that’s for old people.

29-42 First homeowners

At last they make their appearance: the first of our property buying segments. First homeowners swarm to the outermost suburbs where they, well, procreate. Lots of kids brings on an apartment squeeze which eventually gives way to a surge in demand for the three-bedroom brick veneer.

43-51 Parents of teenagers

We’ve arrived at the centre of the property universe. Here’s a place where both parents work. Here’s a place where the nest is far from empty or quiet. Here’s a place where teenagers are trying to get away from adults and where adults are trying to keep away from teenagers. Here’s the raison d’être for the McMansion.

52-55 The seachange chute

By their early 50s both partners are at the peak of their income earning capacity. It’s also the time in life when a friend of a friend drops dead from a heart attack. It’s also the time in which parents die. It’s in times such as this that the mind turns to matters of mortality. Switch direction; scale back; downsize; and buy that cute place ‘down the coast’ or ‘up in the hills’. Note that this stage is sometimes hampered by the presence of Swingles in the family home who simply refuse to leave.

56-64 Portfolio lifestylers

The late 50s and early 60s are being refashioned by the boomers into a brand new segment. This is a time for a little bit of this and a little bit of that. Paid work for two days; golf on another day; do some volunteering at the local service club; perhaps do something with your spouse (it’s called investing in your relationship – you’ve got another 25 years together; better start liking each other). Don’t want a retirement home; they want seachange and treechange property within striking distance of a capital city.

65-78 Active retirees

Don’t you even think of shunting this lot off to a retirement home. Instead think grey nomad; think the Winnebago Effect. Perhaps even sell the house to take the trip of a lifetime and downsize on the return. Perhaps fall in love with Hervey Bay on the way and buy a place in the sun.

79+ Frail elderly

Now it’s time to think about assisted living and not a moment earlier. All these lifestyle villages for the over 55s need to rethink and narrow their market. The practical market for this product is the over 78s.

And to think we’ve created all these submarkets for property and the boomers have yet to move beyond the Seachange chute!

Bernard Salt is a partner with KPMG

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