Friday, Aug 22, 2008
Two Decades Worth Of Bad News For House Prices
BBC News: Children outnumbered by over-60s
Take the figures quoted in this article and the back of an envelope and a 35% reduction in house prices seems a very conservative estimate and the chances of a recovery beginning in 2012 is pretty remote. In fact the property market is likely to remain dire as the 'grey bulgle' works its way out of the system.
Posted by peter kruger @ 11:03 AM (543 views) Add Comment
9 Comments
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1. Panda said...
This is a numerical block of data for a phenomenon that has been well known for a while. Referred to as the "pig in the pipe", the baby boomers have caused a great disproportion in the economy as they grasp every asset they clap their eyes on and consume faster than they produce. They are interesting as an exhibition case, at the very least in that they are a monumental burden both to their parents and to their children, while contributing to a net decrease in national wealth.
Lets just hope that MY lot do better.
2. mark wadsworth said...
Can you explain your back of envelope calculation pls?
3. drewster said...
Peter Kruger,
I don't understand your comment. Ignoring the credit crunch for a moment, more people living longer should mean more demand for homes. Kids take up less space than adults (you can squeeze two or three kids into one bedroom); whereas asset-rich single / widowed / divorced old people need a bedroom each.
4. inbreda said...
I think it is the point that old people have a higher propensity to cease breathing than children do (at least in the more immediate future, that is)
5. drewster said...
Panda,
Looks like this one's just a piglet in the pipe - there appears to be a bigger pig on its way...
Census 2001 (for 2008, imagine the whole graph shifted up 1½ bars):
Source: Office for National Statistics
6. inbreda said...
Interesting to see the baby boomers at 50-54, and then their children at 30-39 and then.... oh no. Unfortunately that generation can't afford to have kids.
It is more than a 2 decade problem. The baby boomers will be dieing off over the next 30+ years. In fact unless the overall trend changes, the demand equation looks floored forever.
7. Ash4781 said...
Deflation here we come!
8. drewster said...
Inbreda,
Don't forget that graph is from 2001 - so shift the bars up 1.5 steps.
BTW the US has a similar problem, the baby boomer generation over there is pretty big too. It's also a wealthy cohort, with lots of money saved in pensions which are invested in the stockmarket. When they start withdrawing their pensions the stockmarket is likely to fall....
9. Jungli said...
I'd much rather have a Buy to Let any day than children...