Global Awards News

LONDON: The wave of Baby Boomers altered the nation and property forever with their dramatic impact on the economy and markets, and they aren’t done yet.

While demographers squabble over when exactly one generation ends and the next starts, there is just one generation that everyone agrees on – the Baby Boomers.

It is not just the size of this cohort but also their birthright, as a period of optimism and relief swept the nation and much of the western world after the end of World War II – in ways that are hard to imagine today.

The world’s collective sigh resulted in the huge Baby Boomer generation, marked by record high birth rates in the 18 years, following the end of that global conflict.

Now that Baby Boomers are shifting into retirement, understanding how they transformed every stage of the housing cycle they lived through is critical.

Right now, it is all too common to decry Boomers as a purely materialistic generation.

But that doesn’t do the generation justice.

To understand them, we must recall their parents lived through the Great Depression that was sandwiched by two World Wars.

It’s hardly a surprise then that their Boomer kids measure success in life against a materialistic yardstick.

The amount of social change wrought by this out-size cohort as they steamrolled crusty social norms was truly historic in its scale.

Granted, Boomers were also extremely lucky: born into an unusually peaceful period of history, economic growth through most of their careers, cheap land and free university education.

With so many Baby Boomers entering the workforce at the same time, their economic fortunes could’ve turned out very differently. If there is an endless supply of workers, lower wages and lower household incomes were to be expected.

In fact, Australia’s biggest birth cohort might’ve faced a different economic fortune if it hadn’t been for the sexual revolution of the 1960s.

While wages were suppressed, Baby Boomers had a trick up their sleeve. Women entered the workforce at scale for the first time. Australia went from one to one and a half incomes per household.

Despite pressure on wages, households now had more rather than less money. A society can only use this trick once. Today, female workforce participation is very high and if we want more workers in the economy, we need to import them from overseas.

Back then, newly cashed-up Baby Boomer households spent big on labour-saving devices such as fridges, vacuum cleaners, and washing machines. Most importantly, they also spent their money on cars.

Even young families of modest means could afford a car, and it was these Ford Falcons and Holden EHs that reshaped urban Australia forever. Before Boomers were handed their car keys, our big cities had population densities somewhat similar to European cities. Young Boomers lived near city centres.

But once they had babies in their early-20s, Boomers piled their belongings into their cars and drove up the road until they could afford a quarter acre block. They slapped a brick veneer on top and started living the suburban dream. BBQ, backyard cricket, and a Hills Hoist. The next family repeated the process 20 meters further down the road.

We essentially continued this model of urban growth for the next six decades and now live in outrageously sprawled out cities. Melbourne is eight times less densely populated than Berlin (at roughly 500 vs. 4000 people per square kilometre).

You wonder why it’s expensive to maintain our infrastructure?

A Melburnian needs to pay for an oversized network of roads, sewage pipes, and electricity wires – you get the picture, low density is the most expensive way to house millions of humans. Forget about world-class public transport in such an environment.

The suburbs of yesterday, where Baby Boomers settled, yesterday are the middle suburbs of today. They have unbelievably low population densities considering their vicinity to the CBD.

Baby Boomers loved their suburban bliss and now wanted to protect the status quo. Residents of middle suburbs and their elected councillors generally opposed densification and vetoed new developments.

This exacerbated urban sprawl and drove up house prices as land was hard to find. Right around this time, the idea of housing as a fail-proof investment became ingrained in the collective Australian mind. More developments in your neighbourhood might devalue your biggest asset – not a very tempting proposition.

Occasionally, a quarter acre plot in the middle suburbs was subdivided to counter rising land costs. Think of this only as snails pace densification.

The kids of the Baby Boomers, the Millennials (born 1982-1999), faced ever rising house prices and simply stayed in the middle suburbs with mum and dad longer than previous generations.

Eventually, Millennials did move into town centres, partnered up, moved into one-or two-bedroom apartments, and had babies during the pandemic.

That timing was purely coincidental. But now that Millennials added kids (and cots, prams, toys) to their household, their hipster apartments became crammed. It was time to find a family-sized home.

These homes weren’t available in their inner-city suburbs. Also, Millennials couldn’t move to the middle-suburbs because their beloved Boomer parents hogged family-sized homes, and weren’t even remotely considering downsizing.

Boomers are much more agile, healthy, and richer than previous cohorts of retirees. No need to downsize just yet. So, Millennials in their search for a family home had to jump over the middle suburbs and move to the urban fringe, where new greenfield developments arose in an endless game of urban sprawl.

At about the 4.5 million resident mark, Sydney and Melbourne stopped functioning in their single CBD set-up. Workers lived too far away from their office towers, the rail and road infrastructure couldn’t cope with the daily rush hour.

We have finally overstretched our two biggest cities. As a reaction, planners want to decentralise population growth and spread jobs across multiple secondary CBDs.

The next step for Baby Boomers on their housing journey is downsizing. Most will tell you that they want to be carried out of their house. We shall not count that as a way of downsizing. Once the family home becomes a nuisance to manage or even a hazard, Boomers will be forced to downsize, but that is still a decade out.

Downsizing might be one of the best things that Baby Boomers can do for their health – especially if they live in a car-dependent suburb. While the early retirement years are going to be a golden decade for Boomers who have time, money, and even good health until their late-70s, mental health can deteriorate.

The caveat is that if you live in a car-dependent suburb, your mental health in old age goes down even further.

Now that the oldest Baby Boomers turned 78, we will hopefully see more cases of tactical, preventive downsizing, with Boomers moving into a walkable neighbourhood while both partners are still alive and reasonably healthy. A retirement living village (if that’s your cup of tea) might be particularly helpful in avoiding the issue of social isolation.

The housing journey of Baby Boomers will play out in the 2020s, throughout the 2030s and 2040s as they vacate their middle-suburban homes by choice, necessity, or death. With that final move, Baby Boomers reshape urban Australia one last time.

Their kids will sell the family home. Wealthy families could buy the home and the number of residents will rise. But that’s densification, snails-paced densification but densification nonetheless.

More often than not, the Boomer family home will be bulldozed to make room for two or three townhouses. This likely squeezes around nine or 10 people on to the same lot.

Councils will be pushed to accept more medium density developments, and the middle suburbs will densify at scale. The silver lining for those Baby Boomers that don’t want their suburbs to densify is that at least they don’t have to witness it.