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Michael Marquette of Marquette Turner writes in his Special Report: The biggest post – war crisis that Australia has faced is almost upon us. We have all heard about the aging population and the need for Superannuation to lessen the burden on taxpayers for pensions and other welfare payments. The terrifying statistic that very few people know is that close to 40% of the Australian workforce will reach retirement age in the next 3-5 years.
Unemployment levels in Australia are already extremely low so where are we going to find the people necessary to fill the positions vacated by our retirees? The Australian birth rate is still not even close to the level required to keep up with the pace that baby boomers will leave the workforce.
When put into context the ramifications are enormous. From a skills perspective Australia is struggling to keep up with current requirements and we are already looking abroad for those with the skills needed to keep our economy moving. The Sydney real estate market is very reliant on immigration to maintain demand, thus prices – but where does this leave the rest of the country? The fact is that most immigrants to Australia choose to settle in or around Sydney and as more and more skilled workers are required from overseas the general trend toward increased housing demand in Sydney should continue. Two areas of concern when looking at the effect of the massive reduction of the size of the workforce in this country:
1) How much money will be taken out of Managed Funds for Superannuation payments?
2) Have we adequately planned for infrastructure like rail and roads to attract migrants to areas outside of Sydney?
A massive reduction in the amount held in Managed Funds could have an enormous impact on the stock market as money is withdrawn by the institutional investors. This could have an enormous impact on the capacity of companies already struggling with the skills shortage to continue growing domestically. We may find that Australian companies look at basing themselves abroad to take advantage of lower costs, increased market size and increased labour force.
I have mentioned in previous Marquette Turner e-magazines that Regional cities like Newcastle and Wollongong have been largely ignored. Neither have truly International Airports, nor do they have “Bullet Trains” to connect them to Sydney. How attractive will these cities be to skilled migrants or Australian Companies looking to invest? The simple answer to this is that Regional Australia will suffer greatly due to the neglect of successive Governments.
With the credit crunch making it harder for people to obtain credit to purchase property, retirees reducing the amount in managed funds and the total size of the workforce the outlook is extremely worrying for Australia. How to maintain demand for property and thus maintain pricing in Regional areas is just one of the questions yet to answered. Local Government can only do so much – we need a unified strategy from the Federal and State Governments and we need it now before it’s too late.
Three quarters of Australians are worried about their ability to pay their bills, as inflation remains at elevated levels, a survey by a consumer credit check company shows.
A phone poll commissioned by Veda Advantage showed that 75 per cent of respondents had debt repayment anxiety.
Price rises were a concern for 55 per cent of those polled, such as rising food and petrol costs, with one in two complaining about higher food prices.
More expensive health care was a concern for 44 per cent, with climbing mortgage and rent costs an issue for 37 per cent.
The study also found that 1.3 million Australians spend more than half their income on debt repayments, and 1.8 million Australians spend more than 40 per cent of their income on repayments.
As new home-building figures plummet to their lowest levels since the late 1950s, economists warn that apartments and townhouses will dominate housing in Sydney as we build fewer and fewer freestanding homes.
Melbourne, on the other hand, built 19,100 houses last year, more than three times the detached houses built in Sydney during the same period, according to BIS Shrapnel figures. Brisbane built 11,700 houses.
Sydney is the only city in Australia that builds more apartments than houses – in every other city houses dominate new dwellings
Housing Industry Association report that Sydney’s shift to apartment development has happened as more people prefer to live in the inner city. The other factor was Bob Carr, who said Sydney was effectively shut for business in the 1990s and created a compulsory push towards high density.
Another issue inextricably linked to this issue is Sydney’s infrastructure. As Marquette Turner frequently state, until Sydney corrects its poor infrastructure trend, home ownership – in this case detached dwellings – will become increasingly out of people’s reach.