By Paul Bennion, Managing Director, DEPPRO
The property market and finance sector that supports it, have traditionally being influenced by important social changes in our society.
For example, the huge increase in the number of women employed in the workforce and especially in professional jobs over recent years, has increased the capacity of more individuals and families to own a home or invest in property.
Another major social change that will also have a major impact on the property sector is the increasing life expectancy of Australians.
Life expectancy for a male in Australia is now 80.4 years and 84.6 years. A century ago, life expectancy for males was 55 years and 58 years for females.
The fact that more people are living longer, means that people will generally work longer to support their extended retirement years.
It is a significant fact, for example, that for the first time the number of Australians living to at least 100 years of age topped 4,000 for the first-time last year.
Location of Centenarians
Source ABS Australian Demographic Statistics 2018
The property sector will have to respond to this major social change moving forward by extending age based lending criteria and allowing more mature aged people to purchase investment properties to help fund their retirement.
DEPPRO is already seeing the impact of this major social change being reflected in the age of clients who employ us to undertake tax depreciation schedules for their investment properties.
Fifteen years ago, a large proportion of DEPPRO's client base were aged in their thirties and forties. In contrast today, we have a growing number of clients in their fifties and even some in their sixties.
This ageing of the property investor profile in Australia is set to continue as Government policies will evolve further to encourage more mature people to work longer in life in order to reduce the financial pressure of people accessing the Government funded pension.
At the same time, more younger Australians will look to invest in property as the reality is that superannuation savings are simply not enough to see through most people in retirement - which for some people may now be more than 30 years.
It has been recently estimated that an average Australian wage earner would need to save up to 20% of their annual income and put it into superannuation for 45 years in order to achieve a comfortable retirement.
In contrast, investing in property has been proven to be a secure long-term method of creating personal wealth. Investing in property also gives property investors generous tax benefits that include tax deprecation which can alone deliver thousands of dollars in tax benefits each year for an average property investor.
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