Stop the treadmill. Press ‘pause’ on the Rat Race of life and just ponder a few things about your future for a moment.
2-decades flies by quicker than one might realise.
This time 20-years ago, the i-phone was yet to be developed, Shane Warne had just been handed a 12-month suspension, Facebook did not exist, the Brisbane Lions (AFL) and Penrith Panthers (NRL) were premiers, and Australia’s combined capital city median house price was just $300,000.
Nekminnit, demand for electric cars is gaining strong momentum and 2 out of every 10 households earn their income by working-from-home.
Before we know it, the rest of the world will have their eyes glued to Australia for the Olympic Games (2032) and air-taxis will be a mode of public transport.
Related article: From $1,000 to $1 million (home values)
Within another blink of an eye, it will be 2043.
20-years from now, Australia’s (combined capital city) median house value is anticipated to have increased from the current $900,000 to somewhere in the vicinity of $2.7 million.
If you’re reading this and are currently aged 40 or older, that means you’d (ideally) like to be retired by then.
Hands up if you have clarity regarding what you want your life to resemble in 20-years from now. One can’t expect to accomplish something without really good clarity.
Keep your hand up if you’ve calculated how much income you’ll need for each of the circa 25-years that you hope to enjoy while being out of the workforce (age 60 to 85).
Related article: Top 10 tips for property investors
Are you on track to accumulating the required asset base (aside from your home and superannuation) to support the lifestyle that you want to enjoy?
Failing to plan is akin to planning to fail.
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Use it wisely: time
‘Time’ is one of life’s most precious commodities.
We all have 24-hours in the day, but it’s what one does with it that counts most.
With the last 80-years as evidence for what is probable, the value of a standard house will triple over the next 20-years, just as they did between 2003 and 2023.
Related article: 144 locations that tripled in value
Despite a GFC, a recession, countless natural disasters, a global oil crisis, a significant commodities downturn, stock market crashes and a serious health pandemic, here are some examples of the change in median house value in different cities across different states include:
- Sydney NSW: from $430,000 to $1.2 million (2.8 times)
- Perth WA: from $200,000 to $590,000 (2.9 times)
- Adelaide SA: from $200,000 to $700,000 (3.5 times)
- Geelong VIC: from $185,000 to $750,000 (4 times)
- Fraser Coast QLD: from $130,000 to $540,000 (4.1 times)
- Launceston TAS: from $90,000 to $570,000 (6.3 times).
When ‘time’ is used wisely and when money joins forces with the power of compounding and leverage, investment in real estate can produce outstanding results.
Just imagine using $65,000 cash today as a (10 percent) deposit on a detached house worth $650,000 in one of Australia’s 400 townships.
If history repeats itself over the next 20-years, it will be worth somewhere between $1.95 million (3 times) and say $2.6 million (4 times).
That’s an incredible return on a $65,000 investment.
Related article: Consistently the best asset on the planet
As with every single generation before us, the next 20-years will produce all sorts of challenges and adversity. And technology and science will continue to produce change around us.
But we can all be confident of one staple: it is reasonable to expect that housing will never go out of fashion.
Australia in 2043
Modern science will ensure that people continue to live longer and an innings through to 90+ years of age will be more common.
In a world with continued poor financial literacy, dependency on taxpayer-funded aged pensions and on employer-funded superannuation will result in governments trying harder to trap people in the workforce for longer and longer.
- National population: 34 million
- National housing stock: 15 million
- Standard house price: $2.7 million (combined capital city average)
- Life expectancy: 85yo
- Working from home: 1 out of every 5 in the workforce
- Households renting: 3.5 out of every 10 properties
- Lifestyle trends: telehealth, clean foods, natural environments, home deliveries via air, yoga, Lagree, cycling
- Superannuation access: 70yo+
- Government finances: $100 billion+ spent every year to fund (modest) aged pensions
20-years from now, the difference between the ‘Have’s’ and the ‘Have nots’ will be determined less by occupation type and annual income and more by those who made the most of their time.
It pays to not be complacent.
Related article: The boom is (already) back
Don’t press ‘start’ on that treadmill until you’ve obtained clarity of where you’d like to be 20-years from now.
If you’re currently part of a household that spends a combined 50 to 80 hours per week generating a combined income of $200,000 to $300,000, what’s your plan to redeploy those 50 to 80 hours for other things?
Time. Use it wisely!
Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.
We walk-the-walk. Here’s a recent example of our work for a client.
