For 7 years after I was married, we lived next door to a couple who were normal working people. They didn’t have kids and smoked like a bushfire, but just lived simple lives. Whilst they worked normal jobs, Kevin at a white goods seller and Leanne as a nurse, there was a secret skill they were hiding.
You can find people like this all over the country and perhaps you know someone just like my neighbours. Normal people with superpowers.
You see, while Kev worked selling fridges during the day, he was a total numbers nerd at night, weekends, public holidays or anytime he was not at work.
What sort of numbers?
Demographics.
Now the younger me had heard of this term sure, but never had anything to do with it. So, residing next to a living encyclopedia of demographical information was exceptionally interesting for me. Especially when I began sourcing property back in 2004.
Kev was a great resource, before easy Google search, YouTube videos and of course todays Ai.
I learnt many things from Kev. He was so into demographics and people movement, I had never seen anything like it. He based all his property and share investments around it. Had planned where they were going to retire, exactly how many dollars he should be expecting to pay for things in certain areas, what the monetary forecast looks like decades ahead (on a high level) based on births, deaths and migration today.
He definitely passed an interest in this topic to me, from both an intrigue perspective and a business one.
The connection between demographics, property and the economy is fundamental to the formation of a market.
The markets are people, not things.
And demographics study people.
Property is a thing.
The driver of property is people. So it makes sense to study the people not the thing, property.
One concept Kevin had discussed with me back in very early 2000’s was that in his review of the data suggested that the global population is set for decline. And that some specific countries will have very big issues as they age.
As a young fella who had only heard things like, overpopulation and people like Dick Smith talk about Australian population explosion (big Australia) and the fact the world population was still growing, I thought Kev had lost the plot.
He showed me more data and over the following years I found some other sources and later websites that supported his ‘take’ on the matter.
The world population will stop growing and begin to decline quickly in a period of time that is measurable in our lifetime.
Wow, that goes against everything we are being told…
I was vividly reminded of this last week when 2 things happened. Firstly, I saw on the news that Australian’s birth rate has dropped to around 1.5 children per woman. This is the measurement used to show growth or decline. 2.1 is what they call normal replacement rate.
We have now dropped down below that a fair bit. The second thing that happened was the mighty YouTube algorithm suggested me a video called Birthgap. https://www.youtube.com/watch?v=m2GeVG0XYTc
I found this documentary intriguing and confronting.
Now all docos have an agenda, I get that, but even so, I try to take key verifiable points from anything.
This video is worth a watch if you like stories about humans and trends with a bit of data thrown in.
Spoiler alert: (skip past the 6 points below if you want to watch it yourself)
If you don’t want to watch the video, then I will make some comments about it.
1) Most countries are falling behind their replacement birth rate
2) But as the birth rate drops, it begins to fall hard. Once it goes below 2.1 replacement it quickly continues to fall more and more.
3) Western countries (like Australia) are using migration to prop up the population. This is ok for total numbers but has an impact on other services and products that are made for 0-18 year olds. (nappies, childcare, toys etc.)
4) The doco presents the data in a way that suggests, while total family size is dropping from 100 years ago, the main issue is the rise of childlessness, not smaller families. i.e., families/ people with no children rather than less children.
5) This is said to be due to people waiting longer to have kids, making it more difficult and costly (if IVF etc. are needed) to have children.
6) Due to point 5, then many people willingly and unwillingly end up not having children at all.
I found all this very interesting and of course started wondering how this affects the property markets in our country.
I have spent a bit of time pondering this and will give you my thoughts and links to data I reviewed in the next scribbles.
I think this type of documentary is a great conversation and thought starter. Looking at the bigger picture of things helps us reposition our mind from, ‘Those kids next door are so annoying’ to ‘How does changing global demographics affect my money decisions for investment and spending’.
Take a look at Birthgap and tell me what you think via reply email or on our socials.
Till next time…
Scotty North
Since 2004, Scotty North has been helping people buy the best properties for their needs at prices that simply speak for themselves. Scotty has been instrumental in bridging the gap between financial planning and traditional real estate transactions through his property advice model.
Scotty North is a Qualified Property Investment Advisor (QPIA), with accreditation’s in financial planning, mortgage broking and real estate.
By carefully considering his clients’ goals and planning for market changes via demographics and trends, Scotty designs a future proof outcome not only specific to the client’s needs but dynamic in its execution with performance indicators and exit strategies built in.
