old and wealthy SMH Sat4th

[GIDDO]

This article outlines the wealth and income position of Aussies in various age stages in 2004, according to govt statistics.

Wealth peaks just in time to pay for the blue pills
As expected, older people are generally better off than the younger ones.

... Consider this. These are the average amounts of net worth for households as they progress through the life cycle. Single person under 35, $94,000; young couple with no kids, $226,000; couple whose eldest child is under 5, $366,000; couple whose eldest is 5 to 14 years, $469,000; couple whose eldest is 15 to 24 years, $685,000; couple with children at home who're no longer dependent, $729,000; pre-retirement couple with all the kids gone, $895,000.

But then we hit retirement and wealth starts being eaten into: aged couple, $714,000; single aged person, $437,000.
edit
Of the lowest 20 per cent, with average net worth of just $24,000, 90 per cent are renters and almost half are under 35. Although about half get most of their income from welfare benefits, only 13 per cent are of age pension age, leaving most of the others as sole-parent pensioners or on the dole.

Of the middle 20 per cent, with average net worth of $296,000, more than 90 per cent owned their home. Almost 60 per cent were couples with or without dependent kids. And the 30 per cent reliant on welfare benefits were mostly old people who owned their homes outright.

Of the top 20 per cent, with average net worth of $1.4 million, virtually all of them owned their homes (two-thirds of them, outright). About 70 per cent are couples and two-thirds have salaries as their main source of income, but getting on for a quarter seem to be alleged "self-funded retirees".

So who are the well-lined in Australia? For the most part, the ones in Viagra territory.

Ross Gittins is the Herald's Economics Editor.

Interesting that of the lowest 20%, only 13% are aged pensioners and 90% of them are renters.

Lesson: you are more likely to be young and poor than old and poor.

This might help those landlord s'softers who are looking at matching houses and rental target groups.

 

[peteb]

could we assume that these are just 'normal' familes with no other investments other than their own family home.
so their wealth just increases over time as the equity in their PPOR increases and also the vlaue of the PPRO increases.
maybe they are doing nothing but paying off their home and it's value goes up as does their equity in it ....

now lets see a view of 'not' normal families ... ie SS families .....

 

[GIDDO]

Pete I hope yo be well ahead of the average, which will put me into the 10% minority of the population.

These figures interested me because I have just designed a 3 br home on a small lot that I believe would rent well to a pensioner couple.
Now I learn that pensioners are only 13% of the bottom 20% of the stratas of wealth levels.
Maybe I should modify my design to suit a single mum with 2 kids.

It will be much the same but I will wire in more internet points.
I should have researched a bit better.

 

[Peter Parker]

These figures interested me because I have just designed a 3 br home on a small lot that I believe would rent well to a pensioner couple.
Now I learn that pensioners are only 13% of the bottom 20% of the stratas of wealth levels.
Maybe I should modify my design to suit a single mum with 2 kids.

It will be much the same but I will wire in more internet points.
I should have researched a bit better.

Giddo, I wouldn't regret your design efforts for one moment!

Even if your target market represents 5% of the population and of these only 5% are interested in what you offer, that's still a big market representing thousands of homes.

If you're the only one who gives them what they want (as opposed to big project builders who go for mass markets) then there is still scope to do well.

You might be able to appeal to a slightly different market segment and be able to charge higher rents into the bargain.

Eg there are older people who are footloose globe travellers (maybe they're semi-retired professionals) and these people might rent a place like yours rather than buy. And they wouldn't be short of a buck or two and would be willing to pay for good design. So you could actually do better than your design target market.

Or younger couples where one partner has a disability or mobility impairment would surely be attracted to a house that has no steps, handles everwhere, etc. Again some of these people would be working, so affordability is less of a concern than those on the pension.

In my view the housing market is imperfect. There are huge untapped housing submarkets that the abovementioned socio-economic data doesn't always help identify.

Eg younger single people in country towns (where units are very scarce) or families caring for disabled adult dependents. Now younger single people in country towns may be a declining demographic, but if you're the only show in town providing reasonable housing then you could still profit.

These are too small for the big project builders to do much with (especially outside the big cities) but surely individual investors should be able to find existing properties that are 80% OK and add the final 20% for minimal expense.

Peter

 

[GIDDO]

Ta spider you have made me feel a bit better about it.

I may still put in an extra internet point though