Themes for next few decades in Australia?

[Ausprop]

as for style of home, single level homes are important to the changing demographic

 

[jerrybee]

as for style of home, single level homes are important to the changing demographic

Very good point.

 

[Ausprop]

I mention it because I am seeing it already being desirable

 

[jerrybee]

I mention it because I am seeing it already being desirable

I've seen it myself. One of my uncles mentioned the 7 or so stairs leading up to the front of his single story house is going to be a problem for him soon as he gets older. 7 might as well be 100 if you're at that age.

 

[Peter Parker]

as for style of home, single level homes are important to the changing demographic

An opportunity to provide this may exist in hilly areas on large parcels of land with road at both front and rear. A two storey building is constructed. The lower level has road access from one side while the upper level has access from the other side.

While lifts are expensive, there could be instances (in high land value areas) where they could be used to provide high-rise seniors accommodation. The lifts would need to be larger than normal and provide doors at both sides to allow mobility scooters to be driven in and out without reversing. Also any corridors and balconies would need to be wide.

 

[impermanence]

My experience? Poeple who walk around with uni assignments about the property market sit around waiting for the market to make sense. They do nothing and loose out.

Things are never 'easy'. Wasn't easy 30 years ago when i started out.

Not sure what the alternatives are to researching - listen to advice from friends at barbeques on the next hotspot? I would prefer to do my own research - hopefully I won't lose out over the long term by actually researching something before spending 500k on it.

 

[impermanence]

Big themes?

* Housing retirees. The whole spectrum from independent to low care to high care. All income levels. Will there be an need (possibly forced through economics) for intermediate style accommodation (As America does with its trailer parks)?

* Housing service industry workers. Eg the coffee servers, aged care workers, cleaners, security guards, retail workers that a CBD area needs to run. Need to be within commuting distances of the big cities as these people can't telecommute.

* Age care, health, tax and immigration. Ageing of the population will cause increased demand which will need to be paid for (large parts through taxing others). Ways of doing it cheaper will be sought by governments. Labour costs is a large component of that and if there are immigrants who are willing to work for less it will be difficult to resist bringing in 'guest workers' (ie 457s but for a wider range of jobs). Immigrants will thus be looking after some who have opposed immigration for most of their lives. Trade unions will continue their decline.

* Managing social diversity - the disappearing middle. The population that supports libertarian attitudes on matters like gender, race, sexuality is increasing. So is the population who support conservative, often religiously-based attitudes (the latter due to immigration from some areas). Can we all get along and how?

* Resources, including infrastructure and energy.

* Reduced productivity of land, including that caused by salinity and climate change.

* Urban settlement. If adding a few people each year the cheapest way to do it is add people on the fringes of existing cities. Medium density development is stymied by existing residents of 'blue chip suburbs' resisting change, pushing developers to build high-rises near the CBD or houses on the fringes.

But cities have diseconomies of scale. Eg a small city needs no freeways nor railways. Larger cities have freeways and (mostly surface) suburban railways. Both the latter become inefficient for megacities and expensive tunnelling will be required. Either for metros within cities or bullet trains for interurban travel.

But longer term we are perhaps better to have 10 cities of 3 million than 3 cities of 10 million. Successful decentralisation though is rare - Gold Coast and Canberra have overtaken Hobart but none of the five mainland capitals.

The problem is what's most expedient for the shorter term and what's best for the longer term is different and most of the future is spent unpicking the errors of the former.

Great food for thought there - cheers.

I am interested in how to capitalize on any of the above themes that you have mentioned. The most obvious one to me is the *urban settlement point - more people wanting to live in these blue chip suburbs will lead to increasing demand and fixed supply. It seems like a no brainer to have the majority of your property purchases in these areas.

edit: Re the aged care theme, do you see the income of retirees being an important driver of capital growth? I have the blinkers on a little with regards to what I want to invest in, but for sure the retiring baby boomers and their intentions will be a huge part of the housing story in the coming years - just not sure exactly how to capitalise on it.

In regards to the megacities point, I am relying on the Government's ineptitude and their ability to pass the buck and get little to nothing accomplished at the council, state and federal levels - a bit cynical but that is how I see it playing out. I don't think the Government can point to a spot and say "we want a city of 3 million here" - people live where the jobs are. The jobs are being created in the big cities, based on that I expect 3 cities of 10 million rather than 10 cities of 3. Interesting stuff.

 

[Peter Parker]

edit: Re the aged care theme, do you see the income of retirees being an important driver of capital growth? I have the blinkers on a little with regards to what I want to invest in, but for sure the retiring baby boomers and their intentions will be a huge part of the housing story in the coming years - just not sure exactly how to capitalise on it.

Retirees and superannuants are people on fixed income so that will limit their capacity to pay increasing rent. Hence rent rises will be limited if they're tenants. That will stymie yields unless per unit purchase or construction cost is either low and/or subsidised. In relation to the latter some may need to rely on things like building depreciation on new properties to make the numbers stack up, then they can onsell later.

If they're downsizing owner/buyers they may be able to spend heavily if they sell their existing home but I wouldn't count on it. Many retirees have bad financial structures - ie too much of their wealth is in their PPOR and not enough in investments that provide an income stream. Downsizing can correct this but only if the place they're moving into is significantly cheaper than where they've moved from.

Expect increasing calls for stamp duty reductions to help downsizing retirees, even though the most obvious way of paying for it (including the family home in calculations for the age pension) will be unpopular.

However if there are concessions of this nature, expect increased turnover in postwar middle-distance suburbs that are today demographically oldest. Increased selling activity may depress prices unless there is an equal influx of buyers (likely middle-class families wanting a home in a middle suburb).

I think people have done studies in whether buying shares in a growth sector correlates with above average returns. Not sure the conclusion, but if there is a correlation then age care providers, the health sector, funeral agencies, companies that assist children look after elderly parents, etc could be growth sectors.

 

[Gendry]

Great uni thesis, OP. Any real life experience?

Not sure if you have any value to add/opinions to share here, or just patronising comments?

My experience? Poeple who walk around with uni assignments about the property market sit around waiting for the market to make sense. They do nothing and loose out.

Things are never 'easy'. Wasn't easy 30 years ago when i started out.

so.... the OP was right, you have nothing to add then, just more patronising comments

 

[willair]

As I said above, the way we communicate has increasing importance. I read somewhere that 10% of communication is verbal and the rest is body language. It appears that, for the in-depth idea exchanges that need to take place in a specialised and knowledge-based economy, face-to-face communication is vital.

The effect that I can see this having on property is: high-level idea sharing taking place in the CBD -> (high-paying) jobs located in CBD -> high paid employees living close to CBD -> wealthy people live close to CBD -> increasing property prices close to CBD

Welcome to the site,in the information rich current world we live in with it's simple or complex interactions and the mental architecture of the people that work in any CBD with the need for face too face is not going anytime soon..

 

[Highlygeared]

I mention it because I am seeing it already being desirable

There was a time when ground floor units always fetched the least in an apartment block - not any more. In some instances they're at a premium to those in the middle floors, particularly if there's a bit of courtyard space. So I concur with this view.

Except in Brisbane, where those guys seem to prefer highset Queenslanders

 

[Angel]

I will second the desirability of ground floor units for the elderly and Mums with prams, which we already know is a growing demographic. Add to that units which have wide hallways and access to bathrooms/kitchens and toilets for ppl with disabilities - Another growing demographic and previously untapped.

As household sizes decrease, I believe we will have more demand for one and two bedroom units over family sized and oversized homes. Yes, people will still want their backyards, but I really do believe that smaller sized land will be more and more acceptable in Brisbane. At the moment there is still resistance to small lots. Large land sizes will either be more sought after or not as popular; both markets will be living side by side like in modern suburbs like North Lakes and Warner.

Others have talked about the desire to live close to where they work in the CBD. This is true for some residents - not everyone is a high-end CBD professional. Those of us who cannot hold city property will have to take a second or third tier draw - middle and outer ring suburbs where everyone else can afford to live and/or work. I would love to have jumped into inner Sydney and Brisbane markets, who wouldn't? But it isn't going to happen. So I do the next best thing I can.