Affordable housing, no stamp duty, pets as people: A futurist's vision of Australia in a decade
Listed among the the world's 10 most influential data visualisation scientists, demographer Simon Kuestenmacher spoke with API Magazine about, among other things, the eradication of stamp duty, the picture of a future Australia and, umm, pets treated like humans.
Simon Kuestenmacher, The New Daily's demographer and futurist, and cofounder of the Demographics Group in Melbourne, has authored a new report that forecasts Australian life over the next 10 years, including how and where we’ll live.
Regaled as a star in data animation and interpretation, reaching more than 30 million people every month through his X account, he’s also about to become a dad for the second time and his own life will be heading in a new direction.
But the Munich-born professional is no stranger to change, having moved to Australia for a university semester, only to lose his heart to an Aussie and subsequently live here for the next 16 years and counting.
Holding a masters in geography, Mr Kuestenmacher started his early career with the thought of working in urban planning, but by his own account, “dumb luck” introduced him to demographics.
“It blew me away when I realised, I could do demographics for a living, until then I didn’t know that was an option, so I jumped on the opportunity because it was all the fun stuff and now I get to do it all day, every day,” he told Australian Property Investor Magazine.
His choice proved a good one, as he is now one of the world’s top 50 influencers in data science, and in the top 10 globally for data visualisation.
What the next 10 years holds for Australia
Mr Kuestenmacher’s report focuses on the period between 2023 to 2033, and makes bold statements about housing for various demographics, ranging from Gen Alpha through to the Pre-Boom generations who, among many things, can look forward to affordable homes and the end of stamp duty.
For example, Millennials (or Gen Y, born between 1982 to 1999) will represent the largest demographic of people in the workforce (40 per cent), and they’ll be on the move, from their inner-city apartments to the urban fringes, which they’ll ‘hipsterise’, to raise young families in larger homes with a room for each child, plus a study.
“That size of housing is not available let alone affordable on the urban fringe, so they’ll flow like water to wherever those three- or four-bedroom houses are available and that happens to be the urban fringe and regional Australia.
“In Sydney, for example, western Sydney, which is meant to be a poor area, now has knowledge workers and Millennials moving there, so even the cliché of ‘working class areas’ is changing a lot,” he said.
Housing to become affordable
In the past there were many drivers that made housing less affordable.
A countermeasure was to shrink lot sizes and build cheap houses on the lots, which pre-Covid kept dwelling values in check.
“We’re now at a point where housing is very, very outrageously expensive, and the median house price in Sydney is about 14 times the median annual income.
There is a group in America called Demographia, which describes a severely unaffordable housing market as one where the median house costs five times the median annual income, so no Australian market is even close to being affordable.
“We are finally seeing policy settings being adjusted, aimed at making housing more affordable and the main way we’re doing this is by amping up housing supply, so you’ve seen the generous tax cuts for build-to-rent developments for example, that is meant to have big players with deep pockets add housing at scale; that’s the underlying message.
“Intergenerational wealth transfer will also boost affordability, as year after year, we’ll see more Baby Boomer women dying, which is a morbid reality of demographics, but as those women die, they tend to be the last remaining parent in their relationships, because they are three years younger than their husband with four years longer life expectancy.”
As they die, family wealth is handed over to the next generation.
“That family wealth overwhelmingly sits in the shape of a property and more than anything else, sits on a relatively large block somewhere in the middle suburbs of our capital cities and as those properties enter the market, as described, the two-and-a-half kids will sell the home for a profit, but most won’t be sold as is.
“The brick veneer will probably be bulldozed, then you’ll build any number of townhouses you can squeeze onto the lot, which will lead to an increase in housing stock, especially in the middle suburbs, which will very much soften the market.”
Stamp duty will disappear
Mr Kuestenmacher said stamp duty resulted in states getting hooked on the income, and if I look ahead, and read the future 10, 20 years out, young economists and policy writers, people 35-45, are not yet in positions of power, but soon will be, they are giving me a general sense that we’ll move to a scheme that taxes capital and wealth, rather than taxing income and consumption as happens now.
“So, this is why people couldn’t accumulate wealth and artificially created a loss on their books (for negative gearing).
“So we created this asset-owning class and the non asset-owning class in Australia, which is a big divide, and we try to counter this by taxing wealth, and you tax wealth by creating an annual land tax.
“That also encourages the downsizing of properties, which means all of a sudden you have an empty nester couple who are sitting on a big fat property with no housing costs other than energy and council fees, and all of a sudden they’ve got expensive land tax that really hurts.
“It could be so much smaller, however, if they moved to a nice, age appropriate, two- to three-bedroom apartment.
“Land tax over stamp duty will be a thing, and it will soften the house prices.”
Single person households
Townhouses could become a growing trend in single households, which Mr Kuestenmacher says will occur at both ends of the life spectrum.
As Australians are single for longer, partner later in life, have babies later in life, it means more people are single for longer.
“We also live longer as an aging nation, so we’ll have more single households at the older end of the spectrum who are overwhelmingly women, because they’re widows, as previously described,” he said.
A side phenomenon of single households will be a rise of pets to counteract loneliness.
“We’re already seeing this trend too, where pets are increasingly being named like humans, rather than Mr Paw or something like that, they have human names and that’s a sign of seeking more companionship in a pet.”
Skills shortage and housing
The report suggests there will be a growth in prefabricated housing too, the construction of which may also see the rise of a new way of living for the trades tasked with building them.
“Labour is hard to find, but we can utilise tradies better if we put them all under the same roof, doing tradie things all day long.
“Tradies spend a significant amount of time in their car driving from one site to the next, which is inefficient, and as climate change induced weather events increase, tradies are frequently rained off their site.
“If you build in a factory and build houses inside made up of a couple of walls that go together on site it allows for the tradies to live on site, and another benefit is the reduction of waste, where currently 25-30 per cent of building material waste is quite common on greenfield developments.
“I think because of these issues, prefab will be a thing, plus people with deep pockets and superfunds are actually looking to increase their real estate investments and they’re only looking at big developments, and why wouldn’t you invest into a prefab building facility that would allow you to do this at scale.”
Mr Kuestenmacher’s report explores other facets of Australian life, including the impact of artificial intelligence and self-driving cars.
It also considers the impact on housing of population growth anticipated at 350,000 young Asians immigrating to Australia every year for the next 10 years.
“Somehow, for decades, we’ve had a country with a migration policy and housing policy that aren’t linked and so we grew the population at a faster rate than we grew housing stock or infrastructure.
“That is obviously quite an unacceptable oversight, which hopefully we go on to fix in the long run.
“People say how about we limit migration because fewer immigrants need fewer houses, and we’d fix all our problems, and I’m happy for this approach to occur if people can fix the skill shortage with fewer workers available, which is difficult, or finance universities with less international students.”