22 Jul 2021
Demographics: Millennials (Gen Y)
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
Bernard Salt is one of Australia’s leading demographers and has an interesting take on the reason for the current accelerating residential house prices.
Millennials (Gen Y), typically defined as being born between 1981 and 1996 are moving out of units/apartments/parents due to family formation and need more room to raise children.
The attached chart shows over 600,000 more individuals landing in the 30 and 40 year old demographic over the next 5 years which he argues is accelerating demand for residential houses.
Click for chart.
That implies that the current high residential house prices are here to stay and will only go higher subject to a substantial increase in interest rates and or China dramatically reducing the consumption of our hard commodities.
Both these negative factors are unlikely in the next 3 to 5 years.
However, the future is always full of unknown detail and so as Benjamin Graham taught, remain invested according to your appetite for volatility and when fear and panic take hold, then react by buying more quality assets at discounted prices.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.