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Governments will pursue higher levels of migration - we need to rethink the housing market; New numbers show a younger, bigger, more metropolitan population during the coming decade
Topic Started: 5 Dec 2013, 10:20 PM (484 Views)
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Migration response to ageing boomers calls for recalibration

Bernard Salt
December 05, 2013 12:00AM

THE populations of Sydney and Melbourne have been summarily upped by another million by mid-century, which means that prevailing strategic plans intended to accommodate urban growth to the mid-2030s must now be rejigged.

I'd be looking at land just beyond the edge of the urban growth corridor. My logic is simple: if our two largest cities are indeed to be one million bigger than previously thought by 2051 then the numbers underpinning a strategic plan to say 2036 is going to be at least 500,000 out.

The reason for the grander projections is higher levels of net overseas migration: about 240,000 a year instead of 180,000. The prevailing rate is 242,000. In other words the outlook is for present rates of growth to continue.

The reason governments will pursue higher levels of migration is because of the retirement of the baby boom generation from the workforce and therefore out of the prime tax-paying cohort. And if there’s one thing that politicians of all persuasions agree on it’s the need for a rising mountain of tax. Tax is the wind beneath the wings of politicians…

However, there is more to the recent projections than mere confirmation that the boomers are ageing…

The new projections show rising growth in the short and medium term for youth. For example, the number of Australian 30-somethings increased from 3.0 million to 3.1 million across the 10 years to last year.

The 60-something market offered better growth prospects than the 30-something market across the past decade. However, across the decade to 2022 the 30-something cohort had been expected to jump to 3.7 million (as generation Y leaves its 20s), but now with the revised projections this number is expected to be four million. The immigration program is augmenting the Australian supply of generation Ys.

Given this assessment, which is the better strategic positioning across the coming decade for property investors and developers?

Fighting resident action groups for every single townhouse development site in Killara and Camberwell? Or developing house-and-land packages geared to those in the household formations stage of the life cycle?

While many property groups are seeking new ways to service the lifestyle whims of boomers I think it is timely to revert to the numbers. And the new numbers released last week show a younger, bigger and more metropolitan population during the coming decade.

Read more: http://www.theaustralian.com.au/business/property/migration-response-to-ageing-boomers-calls-for-recalibration/story-fn9656lz-1226775288962#
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