The Property Trio (formerly The Property Planner, Buyer and Professor)

#112: Future-proofing our property market and economy - tackling our ageing population and how to retire wealthy


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https://propertyplanning.com.au/propertyplannerbuyerprofessor/ Weekly market updates 1. NAB late to the property party - bumps up property forecast for 2021 In its quarterly report, NAB has recently adjusted its property forecast for national price growth to now hit 19% in 2021. This is bumped up from its prediction 3 months ago of 14%, (and 6 months ago of 8%). Just goes to show, that if you're not a specialist in the market, you tend to lag behind the data and we're seeing that consistently across banks and investment firm economists. And of course, being bold is not how many economists like to express themselves. 2. Labor reveals plans for property in the run up to the next election A collective sigh of relief was audible all over the nation, after Labor announced that it would not be pursuing changes to negative gearing and capital gains tax. This is an encouraging result, as we are currently facing a housing crisis in our country, and the most vulnerable are experiencing challenges in the rental market. It may come as a surprise, but more than 90% of property investment only own one or two properties. Signalling that it is mum and dad investors that make up the majority of these investors, and while some could say that they are and simply looking to better their retirement, the reality is that they are providing shelter to a significant percentage of our nation's population, and unlike many other nations, Australia doesn't have a social housing policy that provisions for shelter for the majority of renters. How our ageing population drives Australian property markets 1. Ikigai and retirement planning, what is your reason for being? The trio discuss the importance of retirement planning, which for our younger generations, may seem too far into the future to imagine. However, the proliferation of the FIRE movement (financial independence, retire early), has started to permeate and evolve traditional thinking around retirement ages. There are other options that investors can take to retire early, but this takes planning and sacrifice to make happen. Of course, a big part of retirement planning is ensuring that you have a reason for being (or getting out of bed each day), which the Japanese call 'Ikigai'. So much of our identity can be connected to what we do for work, and it is important in retirement planning to ensure that you have the ability to fund your interests once work slows down or stops. 2. Explaining our population pyramid Over time, the percentage of our ageing population has increased. In 1927 our population aged 65 and over was 5%, which moved to 9% by 1977 and is now 15% as at 2017. ABS Projections expect that this will have reached 22% by 2057 and 25% by 2097. 3. Global impacts of an ageing population Australia is not the only nation facing the challenges of an ageing population. Across the globe, Japan's economy has been stagnating for decades, due to increased costs for health and retirement funding. With it's one child policy, China was heading this way too, but have since evolved their policy to mitigate the effects. If China's economy stagnates, this could have international impacts. Thankfully, Australia has one of the best retirement funding schemes in the world, but many who are currently retiring didn't have access to Superannuation for their entire working life. 4. Historical and social factors that have contributed to our increasing elderly population The trio discuss the key changes in our society and economy that are driving our ever-increasing elderly population. From life expectancy, waves of migration activity, women in the work force, slower birth rates and families having less...
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The Property Trio (formerly The Property Planner, Buyer and Professor)By Cate Bakos, David Johnston and Mike Mortlock

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