InvestKit

Bernard Salt KPMG Baby Boomers and Beyond October 2008

This presentation looks at predictions of how the Australian property market will grow and why. This presentation was only supplied as a PDF, so many of the slides are not self explanatory; therfore I have provided some commentary to accompany a few of the slides.

 Page 3. Meet the new consumer tribes…the bush, the beach, the ‘burbs and the Chinese. This slide looks at the top 10 growth areas in Australia over the 12 months to June 2007 in context of the very large immigration numbers (viewed by country of origin). Incidentally, during his speech Bernard drew attention to the potential business opportunities of supplying the Chinese and Indian communities. 

 Page 4. Singles and couples dominate household formation in capital city markets. This is especially interesting as it shows how different capital cities have different household structures. As an investor you might want to consider your purchase with this in mind 

Page 5. More housing required in Australia’s’ fastest growing lifestyle communities on the coast. An amazing indication of population growth and, one would assume capital growth. Note that the top 10 are on the beach. Bernard believes that given half a chance most Aussies would elect a ‘sea change’ or ‘tree change’ lifestyle. NB the first regional area highlighted is Mt Barker. Bernard indicated the large population growth in this area is due to the new infrastructure that makes this ‘tree change’ area less than 30minutes to downtown Adelaide CBD. His hot prediction is the Victorian coast once the Geelong bypass is in place 

Page 9. Growth in the value of residential property has been underpinned by a demographic tailwind. Population growth within the prime earning years of 40-59 has created growth in property values. Note the large population reduction in the next 20 years and the effect that may have on property prices.  

Page 12/13. There is a ‘demographic fault’ line running through the Australian labour force. In 2004, predictions for the population over the next 20 years created considerable concern as baby boomers were exiting the market in greater numbers than those of the Gen Ys coming in. Consequently there will be a smaller workforce to provide stimulation to the economy and to provide for the ageing population. The 2008 prediction comes from the Immigration Dept releasing plans to substantially increase immigration. The next slide shows this is an issue in most developed countries and because other countries have similar immigration plans, attracting the workforce we need may not be that simple.

 Page 17 Housing construction has dominated the Australian economy for much of this decade. It is interesting to note which industries have had substantial expansion, especially for those of you looking for new business opportunities 

Conclusion: Bernard has just written a book called The Man Drought, which shows that a single woman at 35 can expect significant issues finding an available man. The next few slides show where the single men are in Sydney and how to get there. The news is even worse for Kiwi women. The good news is that at age 60, Australian women will have their selection of men.

Click here to access the Presentation.