Investors
P: 1800 658 404
View full details
Financial advisers
Contact your state account manager or our client services.
View full details
Shopping Centres
For leasing, casual leasing and brand solutions enquiries
Contact Us
Connect with us to stay up to date with news and updates.

LinkedIn

Census 2016: The opportunities investors need to know

Here, we take a look at how the 2016 Census results could impact investment returns down the track.




Every census delivers fascinating insights into how Australia is changing, and the 2016 census was no different.

The census primarily looks at population trends and but also looks at various other things including accommodation - two factors self-managed super (SMSF) fund investors can keep in mind when thinking about future trends that could impact the way investments perform over time. They influence demand for products and services, which has a flow on effect to the state of the economy and share market.

Here, we take a look at how the 2016 Census results could impact investment returns down the track.

What the aging population means 


The 2016 Census results show the median age in Australia has risen from 37 to 38 between the 2011 and 2016 censuses. One of the biggest shifts has been in the 65 to 69 age group, where the percentage of people in this bracket has grown from 4.3% in 2011 to 5.1% in 2016.

The services sector will benefit as the population ages, with sectors such as healthcare and leisure industries aimed at older Australians among the likely beneficiaries of this demographic shift. Life expectancy for this group is around 20 years, of which at least 15 are likely to be healthy and active. Which means ongoing demand for leisure-related services. This includes international travel, including cruises.

Balancing act


There are also downsides to manage as the population ages. It could mean slower economic growth because the workforce isn't growing as quickly as it used to. This could be an issue in Australia and in most developed countries. 

Australia is actually performing comparatively better than many other nations on this front because our higher fertility rate and the migration program moderates the ageing population effect. Nevertheless, the ratio of those in the workforce to people who are retirees is steadily declining, which means ongoing budgetary pressures. So if we think we've seen a bit of a budget blowout in the last few years, we haven't seen anything compared to what will happen when the population really starts to age from about 2020 onwards.

That means ongoing pressure on governments to save money by cutting back on welfare or lifting taxes, both of which affect spending power. 

Housing market impacts 


Over time, an aging population could mean lower demand for property in the suburbs and more demand for inner city or coastal living. 

The 2016 Census shows a decline in the number of people living in houses, down from 75.6% in 2011 to 72.9% now. In contrast, there has been an increase in the percentage of people living in semi-detached dwellings from 9.9% to 12.7% and an increase in people living in apartments from 13.1% to 13.6% across the same time frame.

At the moment, there's a potential apartment oversupply in Sydney, Melbourne and elsewhere. But that's probably short-term because as the population ages and housing affordability deteriorates, stronger demand for multi-dwelling housing as opposed to standalone suburban housing could be expected.

This should also prompt ongoing demand for properties in sea change locations, fuelled by the demand from retirees who have had enough of the rat race wishing to move to a coastal location, and these areas will benefit from that.The sea change effect notwithstanding, the aging population should prompt ongoing demand for property in crowded cities like Sydney and Melbourne, with more people living in inner city areas.This should encourage demand for services such as fast food and restaurants. Some of these businesses will be combined and packaged into listed entities. 

In summary


The high-level implication of an ageing population is slower potential growth, but growing demand for the services retired baby boomers need. 

There will also be flow-on effects to the housing market, with the aging population keeping demand for city and sea change properties buoyant over the medium term.

There are a number of implications from this for SMSF investors. Listed companies with exposure to the leisure pursuits baby boomers enjoy – eating, drinking, and holidaying – will do well, as will health. On the property side, residential and coastal property developers should perform well also.  

These are certainly interesting considerations for SMSFs when forming their investment views and long-term strategy.
Taking your SMSF to the next level
Download free ebook

Sign up to our newsletter!

Receive regular insights and marketing communications including a weekly update of trending news and market insights that are tailored for SMSF trustees and investors.
AMP's Australian operations are bound by the current Australian privacy legislation which outlines how organisations should manage and use personal information collected and held about their customers. AMP Privacy Policy
Sign me up Not right now. Thanks

Sign up to our newsletter!

Receive regular insights and marketing communications including a weekly update of tending news and market insights that are tailored for SMSF trustees and investors.
AMP's Australian operations are bound by the current Australian privacy legislation which outlines how organisations should manage and use personal information collected and held about their customers. AMP Privacy Policy
Sign me up