I guess yeah a portion will be sold down to help fund retirement if rental proceeds not enough, or not wishing to run as investment property.
Some may reverse mortgage, some may sell place of residence in expensive cities near the job they have just retired from and buy in a nicer locale near the beach or bush etc, some may sell to be able to split proceeds between more than one child etc.
As far as I have read, 51% of all investment properties are owned by baby boomers in Oz. Of those baby boomer owners, 80% of them are in the last ten years of the demographic, being I think, born between 1955 to 1965 approx. That means that those baby boomers who own about 40% of all investment properties are now 55 to 65 years old.
That means that over the next ten years, some may be active in selling a proportion of 4 out of every ten investment or holiday homes in australia, not taking into account the sale of their place of residence.
Many will not sell, however the number is so large, I see this as a large amount of potential selling pressure over the next 10 years.
On the bigger picture crystal ball question, I can only speculate on that, and that we have come to the end of what I see as a bunch of paradigm shifts in the ability of banks being able to lend more and more money.
That is, going from one to two incomes, extension of loan terms (20 to 30 years), interest only loans for investors and owner occupiers, reduction in deposit amounts to next to zero from what used to be 30%, de-regulation in the loan industry, piggybacking loans to buy multiple properties etc.
I cannot see any more ways the banks can force feed debt down the throats of us greedy humans.
That says to me, at best, the prices will grow at wages growth for the forseeable future.
If 3% per year (generous) that would result in a one million dollar property in 2011 being worth about 1.8 million in 2030 using a compounding calculation.
This is a lot worse than the last 15 years, where the growth has been a lot higher.
In any case, due to the baby boomer overhang, and the unwinding of overleveraged positions aka, the dutch disease effect, I expect falling prices for a couple of years from now til 2013/2014, then I expect the prices to go no-where for at least 5 to 10 years, then possibly catch up to the 2010 to 2030 wages growth trajectory between 2020 to 2030.
