In a time of lockdowns, thinking 40 hours ahead is sometimes a challenge.
Now try thinking 40 years ahead.
Well, that’s what the Federal Government has done when it recently released its fifth Intergenerational Report.
It has taken a 40-year view on where we’ll be in 2061 and forecasts that Australia will be older, smaller, and more in debt than previous Intergenerational reports suggested.
What does that mean for our economy and our property markets?
These are some of the questions I’m going to ask Dr. Andrew Wilson, chief economist of My Housing Market and Australia’s leading housing economist, in our Property Insiders chat today.
We’re also going to talk about how our property markets are coping with almost 12 million Australians in lockdown, the latest unemployment figures, and much more.
Watch this week’s video as we discuss what happened in our auction markets over the weekend and how the Australian property markets are coping with the lockdown.
Sydney Auction Market
The hot Sydney auction market is holding on despite the lockdown.
The Sydney weekend auction market continues its resilient performance in the face of an increasingly restrictive local Covid lockdown.
Although Sydney reported another this year to date low clearance rate on Saturday at 76.6%, it was nonetheless just below the 76.9% reported over the previous weekend and well ahead of the 64.6% recorded over the same weekend last year.
Underlying activity in the Sydney market clearly remains strong, with the lower clearance rates again impacted by another high number of lockdown-related withdrawals – 22% of reports at auctions.
Melbourne Auction Market
Another good weekend for Melbourne auction sellers generally.
Melbourne’s auction clearance rate was steady at the weekend indicating more strong results for most sellers despite a surge in mid-winter listings.
Melbourne recorded a clearance rate of 76.7% which was just below the previous weekend 76.9%, but well ahead of the shutdown impact in 44.9% recorded over the same weekend last year.
A new July record of 977 homes was listed to go under the hammer on Saturday, which was ahead of last week’s previous record of 853 auctions and reflects the easing over recent weeks of the local Covid restrictions.
Latest Unemployment figures
Over the last week, the latest jobless figures came out and unemployment fell to below 5%, the lowest level in over a decade.
- The unemployment rate fell from 5.12% to a decade low of 4.9% in June
- There were more full-time jobs created (+51 600) and the number of part-time jobs fell available fell by -22,500
- The number of people employed in Australia rose to a record high of 13.154 million
- Victoria’s unemployment figure is down to 4.5% – what an amazing feat for the State hit hardest by lockdowns last year.
Eviction bans and support payments for Sydney renters and landlords
A 60-day moratorium on evictions has been announced by the New South Wales Treasurer for tenants if they have lost at least 25% of their income in the latest lockdown.
New South Wales workers will also be able to access Federal Government support of $375 a week if they’ve lost between 8 and 20 hours of work a week – this increases up to $600 a week if they’ve lost more than 20 hours of work.
In an effort to encourage landlords to offer impacted tenants rent relief the government will give grants of up to $1500 or land tax relief.
The Intergeneration Report
Watch as Dr. Andrew Wilson and I discuss the following elements of the 5th Intergenerational Report:
The recently released report showed that Australia is going to be smaller, older, and more in debt than previously expected in 40 years’ time.
The previous Intergenerational Report in 2015 projected an Australian population of almost 40 million by 2054-55.
The 2021 update projects 38.8 million by 2060-61, and this means Australia’s population is projected to grow faster than most other developed countries.
Despite the reduction of the projected population, these trends are truly monumental.
If you think about it’s taken Australia well over 200 years since European settlement to reach a population of 25.5 million people.
But in the next 40 years, our population will increase by around 13.3 million people, in other words, it will increase by over 50%.
Currently, there are 2.5 people in each household, but the IGR forecasts the average number of people in each household will shrink a little moving forward.
This will have a massive impact on how much cities look.
It will be a lot for our city planners to deal with and means that our way of living is going to change considerably as town planners struggle to cope with this growth.
Of course, this will impact property investment choices, but strategic knowledgeable investors will be well-placed to capitalise on the changing trends.
To deal with this population growth, by 2061 we are going to require one new property for every two properties that currently exist – think about that – where are we going to put them?
In other words, we are going to require about a third more real estate than we currently have.
How valuable is this going to make well-located Real Estate moving forward?
Also in this week’s video, we discussed Australia may handle migration moving forward considering that we are experiencing low wages growth.
However, with more Australians moving into retirement years, in the future, Australia will require skilled tax-paying workers to help pay for our health care system.
Currently, there are 4.5 people in the workforce supporting Australians aged over 65.
By 2061, and the current projections there will only be 2.5 workers for every Australian aged over 65.
Michael Yardney is CEO of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.
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