I recently read an article published by Harvard geneticist David Sinclair, stating that in our life time, being able to increase life expectancy’s to 150 years and reversing the ageing process would be distinctly possible. Economist Christopher Joye further wrote that this will completely revolutionise our economy… And he’s right…
The statistics the government is currently working off in regards to population growth and how this will shape policy making for infrastructure, jobs creation and ultimately the demand on housing within our major centres.
According to current mortality data; A person born in 1978 will live for around 73 years, however those who are born in 2016 have a 14 percent longer life expectancy which will mean they live for an extra 10 years on average.
The issue, however, (as pointed out in a recent article published by Chris Joye) is that historic mortality data does not account for the advances in contemporary medical advances which are likely to throw the life expectancy averages (which have historically moved in a linear line) into overdrive and possibly see 10-20 per cent greater life expectancy within our lifetime.
This can and will have a profound impact on the economy and property markets if we even lived for an additional 15 years. Ultimately, there will be fewer people dying and therefore a far greater supply along with a huge long-term upside to the economy with more people working longer, paying taxes and building up their superannuation position to a far greater level.
As Chris Joye put is, to look at it another way, ‘The current Sydney population is sitting at around 5 million people. Within 43 years this is projected to leap to 8.5 million people in the ABS base case. If we add in a superior 0.5-year annual longevity increase, we are talking about 9.7 million dwellers (double the current Sydney population).
So, will the rich get richer? You bet! But there is most certainly a huge opportunity for new investors to ride this wave of population growth, economic growth and housing demand for generations to come.
Additionally, for property investors, this is another strong incentive to reinforce the long-held adage off property being a time IN the market as much as TIMING the market.
There is always going to be a sound argument for buying within growth markets and securing assets which you can afford to hold for the long term (managing your cash flows). However, you can’t ignore what implications a longer living population will mean to our property market and we will no doubt see huge opportunities for a new generation of property investors who are prepared to buy strategically and hold long term to reap the benefits of a potentially booming long term population within one of the most desirable and liveable countries in the world…