A study by the Swiss-based Bank for International Settlements says the ageing of the population means house price increases over the next 40 years will be about 30 per cent less in Australia than they would otherwise have been.
The study says that share prices will also suffer as an increasing share of the population retires and starts living off their capital.
The study rejects suggestions that the retirement of the baby boomers will be accompanied by an asset price crash, but says capital growth will be much harder to achieve.
Examining the global influence of an ageing population, the study shows Australian house prices have been the fourth fastest-growing in the world over the past 40 years, rising just less than 200 per cent. Spain and Britain, where prices tripled, have suffered large housing price crashes in the past two years.
The BIS, which advises the world's central banks on emerging financial risks, says it does not expect demographic factors alone to cause a house price crash.
It notes in some nations, including Britain, house prices have risen strongly despite a lack of demographic support.
But it says the "headwinds" facing housing markets will also affect share prices, by up to a percentage point over 40 years.
The effect on sharemarkets is likely to occur more rapidly than downward pressure on house prices.
Source: news.com.au
| < Prev | Next > |
|---|
