In 2009 the retirees generally were from the pre-boomer generation, not that attitudes have cut off dates as you suggest.
Mate you're a raving nutter, please stop littering the website with you personal views. If you don't have data you are just another person with a point of view. Support your view with real data or go away.
In 2009 the retirees generally were from the pre-boomer generation, not that attitudes have cut off dates as you suggest.
Mate you're a raving nutter, please stop littering the website with you personal views. If you don't have data you are just another person with a point of view. Support your view with real data or go away.
Playing the forum police again Peter?
Once again, you troll by calling them 'my views'...
If you do not like the ideas I support, then simply ignore them.
No the house doesn't vaporize miw - the cost of owning it just continues to inflate away.
Maybe there's a communication breakdown here caused by fundamentally different ways of looking at things - to some, the house is an asset. And surging asset values are great for me if I already own them.
To others, the house represents the basic human need for shelter and ever - inflating costs are not in the interests of those yet to come along.
So from that point of view it seems obvious that whatever else we might be leaving our children, one big thing we are leaving them is inflated living costs. We are almost out of room to allow them to shoulder ever- larger debt burdens by making the price of borrowing money cheaper. This reality appears so plain that I can't imagine why there should even be any argument about it. This is what I mean by we get the party and they get the hangover.
Leftee, there is only one kind of wealth - that is existing assets and current production. Everything else is just bits in computers and scratches on paper. Don't confuse the game with the score.
There's no way to consume future production, and you can't gain the benefit of an asset after you are dead. If there are inflated living costs in the future, there will be inflated incomes to go with it. Otherwise asset prices will fall. If the children have debts, they will owe them to each other. And by the way somebody's debt is somebody else's asset.
In terms of accumulated infrastructure, when the cohorts get smaller the per-capita share of passed down assets gets bigger. When cohorts are bigger, the per=person share gets smaller. The boomers were the last generation where the cohorts were significantly larger. My parent's generation had 3-4 kids per family. Boomers had about 2. The other benefit of smaller cohorts is that the need for new infrastructure development reduces. If Australia had a stable population it could probably save 2% of GDP on infrastructure development. That infrastructure includes housing. In all likelihood future generations will pay relatively less for housing simply because there will be less demand for new housing.
The idea of an earlier generation eating a later generation's lunch just does not hold water. It is impossible. The argument is thinly-disguised and fundamentally dishonest redistributive argument.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
This is a very interesting report that is worth reading. I was quite surprised at how much more Australian retirees intend to leave their children when compared to other nations in the survey.
Actually, it probably makes perfect sense - they likely believe that they'll be rolling in dough after having sold their IP/PPOR for megabucks and so will have plenty left over to hand down as well as funding a lavish retirement. Retirees in other nations tend to either live in poorer countries (India was mentioned) or in countries that have experienced devastating real estate collapses.
That the collective effect of so many people all doing this is simply to inflate their childrens living costs in the future regardless of whatever they might leave is probably not in their thought orbit as individuals.
Note that I have no proof that this is the case and am not suggesting that one particular group is malicious - I'm just putting it forward that this seems very logical on at first brush.
Quote:
If there are inflated living costs in the future, there will be inflated incomes to go with it.
Would you be willing to bet the house on that miw? Because that's sure not the way it's been working so far.
Are you arguing that simply because prices rise, incomes must rise broadly and comeausurately? You don't see the possibility of lower living standards instead?
To me, the situation is very plain - one group is increasingly benefitting at the expense of another. While rising prices squeeze many of those coming along, they benefit another group through rising equity, allowing them to continue indulging - I'm sure you have seen that one group who own more houses than they can live in now make up almost half of all buyers.
I'm not really sure I follow your argument miw - you seem to be insinuating that if prices jump by well ahead of inflation this year, that will be of no consequence whatsoever to first-timers coming along next year. Did their incomes all grow ahead of inflation? Did interest rates keep falling (not much room left there)? How is it that rapidly rising prices today somehow do not create an extra burden tomorrow for those coming along for the first time?
Would you be willing to bet the house on that miw? Because that's sure not the way it's been working so far.
Are you arguing that simply because prices rise, incomes must rise broadly and comeausurately? You don't see the possibility of lower living standards instead?
Yes I would. Assets are only worth what people will pay for them. Nothing drives asset prices down like people not being able to afford to pay for them. If incomes don't rise, neither will house prices.
Asset prices now are far higher than they were 30 years ago, yet living standards are also much higher than they were 30 years ago.
Quote:
To me, the situation is very plain - one group is increasingly benefitting at the expense of another. While rising prices squeeze many of those coming along, they benefit another group through rising equity, allowing them to continue indulging - I'm sure you have seen that one group who own more houses than they can live in now make up almost half of all buyers.
I'm not really sure I follow your argument miw - you seem to be insinuating that if prices jump by well ahead of inflation this year, that will be of no consequence whatsoever to first-timers coming along next year. Did their incomes all grow ahead of inflation? Did interest rates keep falling (not much room left there)? How is it that rapidly rising prices today somehow do not create an extra burden tomorrow for those coming along for the first time?
Actually, over 65% of people live in a home they bought. Right now a lot of the *transactions* are for houses that the new owners will not live in. But that does not mean that the ratio of people who don't live in a house to which they (or one of the family at least) has title is necessarily changing. (It might be, or it might not be, but the ratio seems pretty stable to me.) It could just be one group of investors getting out and another group getting in. Nor does it really matter if the ratio changes, since it really reflects preferences. For example, the Germans seem to prefer to rent. Does that mean the housing situation is dire in Germany?
What happens from one year to the next is of little consequence. It's noise. Sydney prices have grown well ahead of inflation in the last 2 years after growing at slightly less than incomes for the previous 9.
But that is all 100% irrelevant to the discussion. When the boomers pass on, GenX will own the lion's share of the assets, and when they pass on it will be GenY. 20 years ago the lion's share of assets were owned by pre-war babies. It is just not possible for dead people to own assets. Whether the assets pass on by inheritance or by being flogged off to people who are not heirs is immaterial. If there are debts, debts are assets and they will be passed on as well.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
miw - I'm fully aware we can't consume future production in the here and now. But that has zero bearing on what is happening here.
But your argument seems to boil down to "it is impossible for one group to benefit today at the expense of another in the future". This is nonsense miw - it's been happening right in front of us and is continuing to do so.
If it were not the case, this forum would probably not even exist since there would be little to argue about.
So a boomer lives longer than they expected, by perhaps 10 yaers, and spends all of their wealth on aged care. Nothing is left to pass on to Gen X. Miw, you totally igone the increase in lonjevity and the boomers who are in denial of it.
So a boomer lives longer than they expected, by perhaps 10 yaers, and spends all of their wealth on aged care. Nothing is left to pass on to Gen X. Miw, you totally igone the increase in lonjevity and the boomers who are in denial of it.
Absolutely no one is in denial about the greater life expectancy of boomers, and gen X will have an even longer life expectancy, and gen Y longer again, ad infinitum.
You are the only person on the planet who thinks people living longer healthier lives is bad.
Any expressed market opinion is my own and is not to be taken as financial advice
Absolutely no one is in denial about the greater life expectancy of boomers, and gen X will have an even longer life expectancy, and gen Y longer again, ad infinitum.
You are the only person on the planet who thinks people living longer healthier lives is bad.
When did I say increased lonjevity was a bad thing? Making things up Peter?
"The latest ABS data reports the life expectancy at birth for a male as 79 and a female as 8416. these figures are reported in the media and most Australian retirees base their views on how long they will live on this information. the more realistic predicted scenario is much more dramatic. After allowing for mortality improvements on a cohort basis (refer to Appendix A), it’s estimated that retirees aged 65 now (i.e. in 2010) will live until 86 for men and 89 for women. So rather than living 14 years after age 65, men are expected to live 21 years i.e. 50% longer! Similarly women will be living 26% longer! By 2050 the average life expectancy for people aged 65 is projected to have improved to 92 for men and 93 for women."
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