Hard To Predict But Let’s Go
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It's the Real Estate Podcast brought to you by Ray White, the largest real estate and property group in Australasia. And welcome to another episode of the Real Estate Podcast. We're talking with Simon Kustenmaha from the Demographics Group. Welcome back, Simon. Thanks for having me. And we're going to have a look at the return of migration. This is going to help stabilise the inner city rental market with international students, for example, coming back into Australia. The rental market will love this to pieces because it is really going to be a much needed boost.
Absolutely. So when we talk about migration kicking or coming back to Australia, the first segment of the population back through the doors will be international students, simply because unis are desperate for them. They are a great source of income. And also from a housing perspective, they will fill up an empty segment of the market, which talk about rising house prices, but this growth of the market was driven by family-sized homes. So those international students, they come to a relatively cheap inner city market of one or two bedroom apartments. So that's wonderful. So there can be quite a few international students through the borders without driving prices up too much.
And when it comes to the housing market, a lot of eyeballs are on the baby boomers. And I sense that when things really do start to open up, it will be the baby boomers who might spend a hell of a lot of money because many of them have got the time and certainly the money, many of them on their side. Is that how you see that sort of playing out?
Oh, totally.
What role does migration play in stabilizing the rental market?
So the baby boomers, more than half of them are already of retirement age. They, you know, they still have 10, 15 years of healthy, active lives in front of them. And they wanted to use those golden years. And just when they were about to, you know, head out and explore the world, a new pandemic hit and they were cheated out of, you know, holidaying overseas. They were cheated out on spending time with their grandchildren and So they feel a sense of urgency right now. And from any marketing perspective, this is a very attractive cohort because they, as you mentioned, they are rich in both time and money and they feel a sense of urgency. There's literally not a better customer cohort that you could wish for.
And talking of the baby boomers, what about the trend prediction around retirement and those in their 60s and 70s maybe saying, well, not quite ready to retire yet and still working?
Yeah, so this is the continuation of an existing or long existing trend is that people don't retire anymore in terms of, you know, you get the golden watch on a Friday and from Saturday on you essentially live on the golf course. That's not how people retire. People now slide into retirement. You slowly scale back the weeks and the days per week. that you work, you work four days, you work three days, you still do the occasional consulting for your job. All of this is made possible by the fact that more and more people of retirement age are actually in knowledge jobs, in knowledge work jobs, in jobs that don't require physical labor to continue the work. You can't do this at work until you're in your 80s when you do hard physical labor.
That doesn't work. But for, you know, a suburban accountant can easily do their job another 10, 15 years at a scaled back level without harming themselves.
So I don't know if you've got any trends with the metric as a result of the COVID, but it seems to me because this age bracket, 60s to 70s, will have adapted if their office workers would have adapted to working from home. So that probably extends out those 60 to 70 year old plus people continuing to work from home, yeah?
Absolutely. So you have this trend of baby boomers working on they have a study at home they have the setup at home so that means they retire later that means they will still in some way or form stay connected to their inner city office arguably so that means that they will only sell their family home later in life that means that they're
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