Australian Housing: Don't Panic
Over the past year, Australian house prices have seen 12 consecutive months of decline, the longest streak of persistent falls in over 20 years. House prices are now ~4% lower than this time last year — the weakest performance in the housing market since 2012. Show More
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A ticking time bomb in 7 charts
In part one of this deep-dive, we analysed the economic impact a demographic headwind can have using Japan as a case in point. In part two, we looked at how an ageing population can impact government debt. To conclude this series, we discuss the impact demographics may have on inflation,... Show More
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Funding the challenge: the impact of an ageing population on government debt
In part one of this deep-dive, we analysed the economic impact a demographic headwind can have using Japan as a case in point. In part two, we look at how an ageing population can impact government debt. Show More
Looking to the East – A lesson from Japan
In 2011 a dramatic shift occurred throughout the developed world — working-age populations began a multi-decade decline. Demographic shifts in an economy like this can have profound effects on economic factors, leading to changes in growth and debt metrics. This three-part series explores: Show More
The highs and lows of unemployment and wages
The September employment report showed that the Australian unemployment rate has fallen to 5%, its lowest level since 2011. While this is undoubtedly a strong result, two labour market indicators raise questions over whether this will translate into higher wages. Show More
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A major headwind to global recovery
The narrative we see at the moment is for a US-led, global recovery. However, the U.S. economy is at 2% inflation and 2% growth. Both times we had these conditions in recent years, growth fell away very quickly. Here we look at a major headwind that could see this pattern... Show More
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The outlook for Australian house prices
Over the past 15 years Australian house prices have been on an incredible run, resulting in Australian households becoming some of the most indebted in the world. So what is the economic cost of Australia’s sky high property prices and what could it mean for property prices in 2018? Show More
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Hi Malcom and Wolfgang, This analysis was really meant to be focused on Developed Countries, but you are both correct in pointing out that the trajectories of China and India are going to be very important for the world. I am actually already in the process of looking at China's aging demographics and what factors could offset its effects. This should be ready over the next few weeks.
Hi Romayne, Yes, this is an idea that I addressed in Part Two of this series, which you can find a link to above. Declining working age populations introduces a challenge for governments on how to fund the increasing costs associated with an aging society. For example, the Australian Bureau of Statistics (ABS) reports that approximately 40% of Australian taxation revenues come from income taxes on individuals, so continuing to increase employment is a good way to fund the challenge without having to find new sources of revenue. Having said that, the link to GDP growth is probably a little more complicated. The simplest way that I like to think about this is that the more people there are in the economy, and in particular those who are working, the greater consumption can be. Where that growth comes from is another question, but given government debt levels are high globally, it’s a valid question to ask what this means for growth in the future and whether they can grow their way out of the problem.