When I was last back in Sydney visiting my in laws I sat down with my FIL to have the yearly property investment talk (generally he tells me what I got wrong, laughs and then has a beer or three) but both of us agree that there is a shift in preference away from houses with yards and into ‘simplified’ living. I’m not saying that established houses don’t have excellent capital growth and investment potential what I am asking is how do we target the next phase of investment which is retiree’s selling up and moving into smaller homes/unit (not necessarily retirement communities) and younger families targeting the low hassle factor (no yards to mow, no eaves to clean, no possums to chase away).
Is it low density OTP apartments from established developers (3 bedroom or higher)? Townhouses? Anyone else have any thoughts on this?
Interesting questions. I obviously don’t know much, but here is a summary of what the bright minds of the world says:
1. Bank of England, millions of jobs (accounting, banking, insurance, retail sales, marketing, medics, police force, journalists, lawyers, etc) will be replaced by robots / machines in 20 years time. http://money.cnn.com/2015/05/13/news/economy/robots-threaten-jobs-unemployment/?iid=EL
Which means
a. there will be low employments, new graduates must know more than robots to get a job,
b. huge wealth disparity ie. the majority are poor needing government spending or charity spending to house and medical services for them
c. resentments towards the wealthy / middle class, they will be taxed even more essentially ‘punished’ for being wealthy
d. crime rates increase – gated community for the wealthy will be popular with their own security guards and infrastructure eg. garbage collection, etc and there will be more ghettos / public housing estates for the poor2. These people do know a lot, but the interesting / relevant analysis is about Oz’s trading partners China, US, Japan, Germany and UK 25 years from now. Also ISIS will persist, so there will be threats to national security. https://geopoliticalfutures.com/the-road-to-2040-a-summary-of-the-forecast/
Anyway, these are just forecasts so depends on your takes on it. But my thoughts are these:
1. For PPOR, make sure you are in the area where your neighbours are of similar social class, easier to band together to pay for private security / medical services / electricity / water / garbage collection / food or supermarket, etc.
2. For investments, depending on your strategy – for the poor or middle class? Smaller high density units are cheaper but you may not get paid, high maintenance costs, etc. And even if you invest in IPs targeted for middle class, if the location is full of poor people – you will still get problems associated with high density units. So again it is location location location with eyes towards the future.
3. The wealthy will be punished through tax, etc. Best to start accumulating through companies rather than individual names. Negative gearing will go as the government will eventually become more socialist (reflecting the vast number of labour voters)Life will be so very different than what we know now. Maybe just as different as the past – in 1980s banks use type writers, now computers make them so much faster and accurate; in 1980s Kodak was a big super power now it’s dead; in 1960s unmarried mothers were such a stigma they are now every where.
I don’t know… these things scare the shit outta me…
Cattleya
Here to learn the ropes of property investing & share knowledge, not trying to sell anything at all.
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