Brett Warren , National Director – Metropole Group
In an era of political instability, significant financial investment decisions must focus on expected demographic trends and societal shifts, according to one of the nation’s leading demographers.
Speaking ahead of his keynote address at Metropole’s Wealth Retreat in early May, Simon Kuestenmacher, co-founder of The Demographics Group, said several societal shifts are set to shape Australia’s economic landscape over the next decade.
“We know for a fact that Australia’s going to age like it never has before over the next decade,” Mr Kuestenmacher said.
“We are having baby boomers move into old age, so that means that the demand for retirement living, and aged services of all sorts, is going to go through the roof. If you’re betting on that horse in any way or form, you’d be very, very unlucky if this isn’t successful.”
He said the biggest generation in Australian history – the Millennials – will also move into the highest spending phase of their life cycles, which is the mid-40s.
“This means that any businesses that sell consumer goods such as beds, fridges, and barbecues are likely to be sound investment vehicles,” he said.
“Another broader societal shift that is already under way is what I call the ‘hollowing out’ of Australian society, which means that the bell curve of the 1960s, when most people were middle class, no longer exists.
“Today, and into the future, it is more like a J, with more poor people and more rich people, but fewer middle class. That middle class egalitarian wonderland no longer exists.”
Metropole National Director Brett Warren said understanding demographics has to become a part of a property investors toolbox in the years and decades ahead.
“History will show that all property booms come as a result of significant structural and social shifts,” Mr Warren said.
“Think females joining the workforce to create a second family income, mining booms leading to rising wealth, and more recently the COVID-19 pandemic supercharging property prices around the nation.”
These insights highlight the critical importance of aligning investment strategies with future demographic trends, Mr Warren said.
“Understanding the evolving socio-economic landscape is crucial for making informed investment decisions. The shift from a middle-class majority to a more polarised wealth distribution requires a re-evaluation of traditional business models,” he said.
“For example, as Australia’s population ages, the demand for retirement living and aged care services will undoubtedly surge, presenting lucrative opportunities for investors,” he said.
“Likewise, the transition of Millennials into their peak spending years is a significant economic driver. Businesses and investors catering to this demographic stand to benefit immensely.”
Mr Kuestenmacher said it was vital that investment decisions today take into consideration the changing demographic landscape that lies ahead.
“What does this mean for investment decisions? Well, what kind of housing is in demand because we have more rich people and fewer middle class?” he said.
“Do we have more high-end supermarkets and fewer affordable ones? They were rich people in the 1960s, but there was not enough to justify a fully stocked supermarket during a cyclone, for example.”
However, he said the most pressing economic issue every business owner and serious investor needs to understand is the prolonged skills shortage.
“The skills shortage simply means that we’re running out of workers and that is not going to get better in the coming decades, even under a high migration regime. The skill shortage is here to stay,” he said.
“First and foremost, if you run your own business, you need to be aware that the skill shortage will be your single biggest worry.
“Treat your existing staff nicely, but most importantly, think about how you can make your business run with fewer staff. If you invest in AI, automation and robotics right now, they will ultimately pay off.”
ENDS
For more information or to organise an interview with Mr Warren please contact:
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