The effect of the passing of Baby Boomers on Real Estate Prices.

We hear day in day out why we need foreigners to boost population, bring in expertise, increase manpower etc.

However, the burning question remains is that, as the Baby Boomers age, pass on (mati, die) and in so doing relinquish ownership of their material assets (Property, investments, savings), the snowball effect of which could lead to an excess in supply for which Generation X (born between mid-60s to end 70s) and Y (80s-mid 90s) would have insufficient numbers or the financial strength to consume, thus potentially leading to a situation were this sudden excess will have to align to market expectations, i.e.- a drop in prices. While I do not see a drastic crash in big ticket items, it is possible that the trend will be that of a downward one so long as the world's population is shrinking.

It's just that the dip will be more significant as the Baby Boomers are the largest population "bubble" this earth has ever seen.

The Baby Boomer generation through their passage of time, have made their presence felt in most modern, industrialised nations, evident in terms of surging consumerism and unprecedented wealth creation. However, with the success in population control and massive urbanisation leading to the modern nuclear families or childless couples, the age demographic is now an inverted pyramid of which I feel that I am just looking over at it's precipice.

Bucking this trend however (or at least, postponing it), is India. Having the youngest workforce around, they have the numbers sufficient enough at the base productive age levels to sustain the aging population.

Perhaps this is why many financial institutions are helmed by Indians; A actuary may have calculated that by so doing, the business in gaining inroads to India, of which may be the largest source of interest income in time when the population comes of age and prosperity and where credit on big ticket items (real estate) will be extended with a lower risk of default.

Perhaps this is why the intense interest in attracting "talents" to SG; It is a means of creating wealth and getting taxes for that rain - correction - the ever increasing number of rainy days Generation X in time will have to seek shelter from.

Anyone else ever pondered over this?

A big flaw in your point of view is the increasing world population. The world has moved on and there are a lot more people today than in the 60s. Even if the baby boomers start dying at an increased rate.

KopiO said:

A big flaw in your point of view is the increasing world population. The world has moved on and there are a lot more people today than in the 60s. Even if the baby boomers start dying at an increased rate.

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although the world population is increasing, there's a huge wealth disparity between the 1st world and 3rd. while the 1st world is undergoing a negative replacement rate, the 3rd world is experiencing a baby boom, far outstripping the average global rate. 50 years from now, this world will be dominated by a small number of elites and intelligentsia in terms of wealth and industry, and the rest are just aimless, hungry, stupid consumers of low value goods and services. racially, it will be mostly africans, arabs, mexicans, filipinos and indians. and they will be at every corner of the planet. white euros, americans and north asiatics will live in walled cities and rule the earth from their ivory towers, fearful of fraternalizing with the low lives.

True that the world's population has boomed, but the population boom is mostly due to underdeveloped nations with little or no birth control policies, poor health and hygiene infrastructures, which would mean that these people, unless they can break the poverty line, will not be able to sustain any of the current wealth creating economic models 1st world countries advocate.

The passing of the baby boomer generation, which is an generational anomaly of well-to-do western economies, will thus impact subsequent generations of the same socioeconomic class , wouldn't it?

KopiO said:

A big flaw in your point of view is the increasing world population. The world has moved on and there are a lot more people today than in the 60s. Even if the baby boomers start dying at an increased rate.

Click to expand...

QXD said:

We hear day in day out why we need foreigners to boost population, bring in expertise, increase manpower etc.

However, the burning question remains is that, as the Baby Boomers age, pass on (mati, die) and in so doing relinquish ownership of their material assets (Property, investments, savings), the snowball effect of which could lead to an excess in supply for which Generation X (born between mid-60s to end 70s) and Y (80s-mid 90s) would have insufficient numbers or the financial strength to consume, thus potentially leading to a situation were this sudden excess will have to align to market expectations, i.e.- a drop in prices. While I do not see a drastic crash in big ticket items, it is possible that the trend will be that of a downward one so long as the world's population is shrinking.

It's just that the dip will be more significant as the Baby Boomers are the largest population "bubble" this earth has ever seen.

The Baby Boomer generation through their passage of time, have made their presence felt in most modern, industrialised nations, evident in terms of surging consumerism and unprecedented wealth creation. However, with the success in population control and massive urbanisation leadion - ting to the modern nuclear families or childless couples, the age demographic is now an inverted pyramid of which I feel that I am just looking over at it's precipice.

Anyone else ever pondered over this?

Click to expand...

You touch on some key points the baby boomers were a population boom and the demographics drove economic booms last of which was 1990s to early 2000s. The baby boomers spent, peaking at age 47, after this age they tended to reduce spending, downsizing their car, their house and now the entire world economy is on a down cycle as this generation are retiring and spending less from Australia to the States to Europe. Some demographers are very bearish such as Harry Dent, but the trend is there.

The baby boomers stepped into a huge void created by the loss suffered in WWII. They also came onto a period of relative peace after TWO World Wars. And so they prospered.

With the very mobile world today, the dying of these baby boomers are not going to impact the World's TOTAL population much.

Thanks for the insights. The eventual strategy then is how to capitalise on this foreseeable trend. Friends once jokingly said that undertaking or other death related industries in recent years might actually start booming, Cancer/Alzheimers/Dementia pharmaceutical medication, euthanasia, and legal disputes related to deceased estate.

Less than savoury and taboo by conventional wisdom, but it might be those industries that might benefit the most financially.

QXD said:

Thanks for the insights. The eventual strategy then is how to capitalise on this foreseeable trend. Friends once jokingly said that undertaking or other death related industries in recent years might actually start booming, Cancer/Alzheimers/Dementia pharmaceutical medication, euthanasia, and legal disputes related to deceased estate.

Less than savoury and taboo by conventional wisdom, but it might be those industries that might benefit the most financially.

Click to expand...

If you want to see future trends. You can't see it from Spore. In Spore the mass importation of foreign workers hide the reality of an aging population.

You must go to places like Canada where an aging population is a reality for decades. The 1st time I went there I remember asking my friend where all the young people were:p That was back when I was younger & ignorant:o

Over there you will that the gov't has made plans to tackle the problem. From building codes that ensure homes are accessible by those with disabilities. To different types of homes that cater to the old. These are not retirement homes but homes that cater to different needs: from the totally dependant to those that can look after themselves. Cheap health care. Social workers that are empowered to help. An environment where the old are treated with respect even if they are poor.

When you compare to what Spore is NOT doing for it's senior citizens, one can really see how backward Spore is