Census 2011: Australia is changing, and fast
The Australian Bureau of Statistics has just released the results of the 2011 Census and they paint a picture of a nation changing positively and very rapidly.
The census was conducted in August last year with 9 million dwellings and their 22.8 million inhabitants receiving a form from 27,000 census collectors.
While the headline results present tremendous opportunities for Australia's superannuation and wealth management sector, they also present huge challenges for any sections of it unwilling to adapt.
For example, Australians are wealthier, getting older, having fewer children, earning more money, spending more on housing, and all this while we are transitioning into a rainbow Eurasian people ideally positioned between East and West like a hedge fund positioned between arbitraging world capital markets.
But fewer of us are getting married and more are likely to never marry. We speak more foreign languages at home and those languages are changing with Mandarin now the second most popular language, surpassing Italian.
Reinforcing this cultural metamorphosis, Chinese and Indian Australians are now our largest non-anglo heritage groupings and the West Asian language of Punjabi is the fastest growing second language. Add in Cantonese and China based languages are now almost 3-times more widely used than Italian, whose usage has in anycase fallen.
Hinduism is meanwhile the fastest growing religion albeit Christianity is of course still by far the most popular.
But it's the sharp rise in Australia's median age and housing costs that presents the most financial challenges as with the median age climbing in 10 years by two years, the implication is that by the middle of this century Australia's median could potentially be a staggering 53 years unless there is a major increase in fertility, mortality or inbound migration.
The government and opposition may not quite realise it yet, but this spells the end of their 'small Australia' policy experiment for the simple reason it would decimate the nation's economy, which in itself creates significant investment opportunities given the National Housing Supply Council this month said in the past decade Australia has produced 230,000 too few new dwellings.
This supply constraint has already pushed up home prices, fuelled by naïve government policies to give cash hand outs to first home buyers that do nothing more than fuel demand against this limited supply, so the average household now spends 34% of their income on mortgage payments compared to just 26% in 2001 notwithstanding lifestyle enhancement factors are partly to blame as well.
Reflecting this, the proportion of Australians who own their home outright fell in the past decade from 34% to 32%, leading to a corresponding 2 percentage point increase in the proportion of Australians who rent. And these rents are going 7% pa, almost triple inflation.
The likelihood of the government introducing any clamp downs on the negatively geared property sector and the estimated $12 billion in annual tax concessions it costs the budget has just retreated even further.
For the mass market, strategies for getting them into the housing market as early as possible are likely to be the best financial advice they could get. For these people, superannuation comes a distant second, no doubt explaining in large part the low engagement frustrations of the superannuation sector.
Source: Financial Standard