461 | Why AI, Office Culture and Medium Density has the Power to Revolutionise Australia’s Property Market! - Chat with Simon Kuestenmacher

What else do we cover , ben ?

And Ben Kingsley , chair of Property Investors Council of Australia and a back-to-back winner of the Property Investment Advisor of the Year Award , and both are partners of the multi-award winning Empower Wealth , co-creators of more , the free lifestyle design app , as well as best-selling authors of the Armchair Guide to Property Investing and Make Money Simple Again .

Stay tuned as they bring you the Insiders Guide to Property Finance and Money Management .

If you love property and you love the idea of self-funding your retirement , you love the idea of having a look over the horizon to see what is essentially a bunch of stats on a piece of paper that Simon can bring to life in story and what it means and trends . It's amazing . So you're right , we've got a lot to share with our community .

So before we get there , ben , I just have a favour for our long-term listeners , if they can help us grow our community right . So I reckon that this podcast that they're about to hear is that insightful for them . You could share it with a friend and it would be insightful for them even if they're not property investors .

And just because it talks about millennials or talks about baby boomers you talk about remember when we were living and there were seven people in a house and what that looks like now , and there is just a lot of stuff about people that a lot of people would get benefit from . So we think it's a ripper .

So if you could share it with as many people as you can . We would be grateful , so if we've added any value to you over the journey since we've been doing this . Ben , that's all we ask of you to screen this on it from wherever you're listening right now and text it , whatsapp it , facebook it , whatever it takes , just to share it with a friend .

We would be grateful for that I agree .

And well , there's a lot of great things that are going to happen with this nation and we've just got to make it happen right , and you know we've got to be positive about that . So it's definitely a glass half full episode today .

So maybe for our audience it might be cheeky for them just to give him a little tweet or something just to say hey , listen , love hearing you on the property couch . We'd love to get you on the property couch and chase for Morgan . Thanks for Morgan , we'll start that outreach very quickly . Let's hope it doesn't take six years like it did for Chris Hoss .

But hey , my mindset minute theme today is I came across this , ben , you might be interested in this but seven disciplines to focus your energies on . That you need a master , right . So I'll quickly riff through them . First one is foundational , so clearly the three Rs that you learn at school reading , writing , arithmetic .

Then physical how to sleep well , eat well and move well . Professional , so your vocational stuff , right , and then we move into a couple of different layers emotional , so developing your EQ . Relational , so communication , influence and dealing with others . Six is very much in the lane of this podcast , which is financial , so personal finance and how to multiply .

And then seven is philosophical and the values that you tend to choose to live by .

Now , I love being in this lane of spend a fair bit of time in this lane of late , because what we do know is that we have all these mooring lines , ben , and sometimes our self beliefs can be limiting because outside of the story that we're telling in our own head , circumstances might suggest that it's actually just a story in your head and it doesn't really

outlist anywhere else . So I know you are well and truly on this train . So , with that in mind , those seven disciplines are what I'm trying to spend my time mastering . I want to fill my mind with other successful people , particularly those who've walked the path that I'm trading or pursuing or sharing any .

I therefore want to share any patterns that I observed with this TPC community . So , for example , we've done Dale Carnegie , we've done Morgan Howell's , all we've spoken to Dave Ramsey , tim Ferriss , james Clear and even this one will make you blush , ben .

But even stuff that you talk about is philosophical ideas that I take on board and look through a different lens as well . So I'm really lucky that I surround myself with a lot of virtual people and I'm lucky to rub shoulders and spend a lot of time with you .

So if I find someone who I resonate with and go deep , I just go sort of fanatical and deep and stay in that lane for a little while . And so Ramit Sethi is someone who I've spent a bit of time with .

He spends time educating younger people on how to manage their money and has a very simple philosophy that's not too dissimilar to Mike Kemp , who we had on the podcast , where it's just get into that dollar cost averaging of just letting time do the work . You don't have to be a champion investor , you just got to be in it for the long term .

So he recently featured in a Netflix documentary on how to get rich . I watched that . I enjoyed . His book is an introduction to personal finance , but I first started hearing about him on the Tim Ferriss podcast . So that's the backdrop , right ? So here's the message In his book .

He made this observation 80% of first generation millionaires ie meaning their parents weren't rich collected their significant wealth by three things One was controlling the spending . Two was regular investing . And three was , in some cases , entrepreneurship . Right .

So an entrepreneurship is basically turning ideas into successful businesses , right Of which property investing is a small business , right it is . So , on average , millionaires invest 20% . This is against still quoting Remate and American stats , all right . So let's just the patterns and the observations is the point of today's mindset minute , right ?

Yeah , so millionaires invest 20% of their household income each year . Their wealth is not measured by how much they make each year , but by how much they've saved and invested over time . Investing is the single most effective way to get rich .

So if we're looking for patterns , ben , those three things seem to resonate beautifully with the philosophy of the property . Catch , because A , we're asking you to control your spending , ie spend less than you earn . Imagine that as a concept .

Number two , we're asking for you to regularly invest , which is chipping away some of your income towards something other than the here and now , something towards the future . So , regular investing , and then entrepreneurship . So how is our audience involved in entrepreneurship ?

Well , if you're buying an investment property , you are one of a small group of people in this country who are , but you are running a small business , and small business is all about entrepreneurship . So you're taking a risk and you're trying to get a return from taking that risk . And for a lot of cases , you're not a greedy fat cat .

You're actually just someone who's trying to use the tax system to your advantage so that you can actually sell fund whilst taking a lot of risk , and a lot of investors have actually seen over the last 12 months that investing in property isn't just rainbows and lollipops , because some of those property investors have had to disproportionately absorb increasing costs that

they haven't passed on to their customer , ie the tenant .

So I just thought we'd reflect on that today , ben , in that if philosophy and I know it's something that you focus on too , and it's something that I'm focusing on here's a philosophy of someone who's out of our market , it's out of our sphere , but still offering the same message and the same core objectives and , to be honest , they're actually really boring

Control your spending regularly , invest and involve yourself in a little bit of entrepreneurship . It's not exactly well . The entrepreneurship is fun , but the rest is pretty boring . So it is never not . Doing the basics well is the secret to success .

So , as we come off the back of Morgan Housel helping us get a better understanding of our spending , which is the hidden stuff behind closed doors that not a lot of people see , here we are just reminding ourselves on what some of the basics are for you to actually get some success so that at some point in the future you can spend your money hopefully on

things that matter to you the most , to you .

it isn't rocket science , it's just building these habits and executing on them . So you know , yeah , bryce , I've taken a lot from , obviously , the conversations you and I have had . Also , we've got out , you know , our silent mentors , the people that we haven't been able to talk to , plus , obviously , our group of people .

And , yes , we're in a business that spends all of its time doing this to help others , and so we're taking all of that rich knowledge and passing it on to our community .

So my takeaway from what you just said is that they are the fundamentals , but also exchange in the dialogue to those people who are doing it well to build confidence , because if you can't believe in what's true and what's available to you , you're never going to take action .

It was wonderful content . Let's cut to it now . All right , ben , I'm very excited to have the conversation we're about to have today . We are chatting with Simon Kustin-Marga . He is a returning guest and he's also a rising star globally in the field of data management and insight .

He is the co-founder of the Demographics Group based in Melbourne , and he's also presented to numerous corporate and industry audiences across Australia and overseas on demographic trends , consumer insights and cultural change in Australia . He is a columnist with the Australian and the New Daily newspaper .

Simon is an engaging speaker who backs his opinion with data and evidence and a very distinct and appealing German accent . Simon , that is true . Welcome back to the property couch . That's great to be back on . That's good to have you .

You co-hosted with me back in episode 353 when this guy was travelling through the north of Western Australia , so that was a really fun chat .

Normally we have a conversation at the beginning with all of our guests about tell us your backstory around money , but given you're a returning guest , we have already covered that , so I just wanted to summarise a few things that we spoke about last time , so I'm just in case anything is updated since . But your parents were both authors .

You said you have to be generous to receive generously . What you do in front of your kids is more important than what you say , which I thought was profound , and not much that you would change with more money , because to you it is just security and stability . Is that still true , simon ?

A couple of the screens I would look at would be more expensive , the chair would be more expensive , but the utility of what I do would be pretty much the same . So that's my approach towards money , and think of me as fiscally conservative stability , financial security that is much more important than pure accumulation of wealth .

That topic is obviously important everywhere , but Aussies are much more interested in this . This is well . You run a massive podcast on the topic and the newspapers are full of this stuff . These things are unthinkable in Germany . So that took a bit of change in pace here .

You've got an interesting way of looking at interest rates with your demography background , so talk to us about what are you seeing in regards to the demographics inside interest rates .

That's the target . And the third one is the general stability , or the general well-being of the Australian population , the prosperity of the nation . The third one is Solvague . You can completely forget about it . So they want inflation 2% to 3% , unemployment 4.5% .

The RBA now finds itself in an environment where they have an inflation rate that is higher than their target and they have an unemployment rate that is much lower than their target , and so they go . No , wait a second .

We have one tool , as the RBA , to fix all of this we can move the cash rate , this interest rate number , up and down , and so that's what they can do . The problem is that they fight an uphill battle against demographics .

What they are doing is absolutely impossible at the moment , being in order to sort of increase the interest rates , arguing if we increase that rate , people stop spending or they slow down their spending , which is deflationary . Then inflation goes down . That's very good .

Problem is we're finding ourselves in a demographic environment over the whole next decade where we want to see the highest spending ever . You have the millennial cohort , the by far biggest generation , moving into the highest spending phase of the life cycle , that's the early family formation stage .

Every penny you earn when you're in your 40s goes straight out the door back into the economy , creates all this beautiful economic activity . Usually and now , that is not wanted by the RBA . Also , when people move into retirement , they're meant to . Historically they're meant to be poor pensioners who have to really carefully watch every dollar that they're spending .

That's not the case right now . The people that are retiring now are asset rich , rich and cash rich , baby boomers , baby boomers and older . They make up a relatively small share of the population , but they hold well over 60% of all the cash savings in this country . High inflation is good for them . They will not stop spending whatsoever .

Yes , theoretically the RBA can amp up interest rates , and they've done it repeatedly . You amp up interest rates . Eventually you'll stop spending . You'll make the society as a whole stop spending . But the people who stop spending , they are the let's call it the bottom quarter , or their abouts , of society .

These are also young people who have no cash savings whatsoever . So you create pain , if you will , at the wrong ends of the spectrum . And also , as soon as people get into trouble , particularly if you have a labor government , they will spend big on those poor , suffering people , which is inflationary in nature . So you fight this uphill battle . That's difficult .

Also , the RBA wants to increase unemployment . They want to create more unemployed people because they want full employment . That's difficult for various reasons . First and foremost , there's a moral recoil that says , ah , we want to have as many people in employment as possible . No , it's a good thing .

Yeah , so you increase those interest rates and makes it harder for businesses to operate . Eventually , some of those businesses will go bust . We need to fire people . You create more unemployment , but what is being served ? Well , you create again masses not masses , but quite a few people that need to be subsidized by the state in state .

Again , that is inflationary . Again , that drives up the need to actually increase interest rates rather further , and you only always create pain at the wrong end of the spectrum . This is brutal .

My argument here is the RBA should leave the cash rate at , as is they would actually should actually send one tiny decline Just to send a positive signal , because as long as the interest rate Sorry , as long as inflation moves in the right direction , that doesn't need to be in the two to three percent bracket .

As long as it moves into the right direction , that's all it takes for now and completely as an RBA , forget about unemployment .

We in Australia will benefit from painfully low unemployment Because over the last two decades Australia fell behind in every single innovation technology type ranking that you could imagine , simply because businesses only innovate under pressure . Australia in a sense had it too easy . We could just grow our wealth through a bit of a mining boom through migration .

Remember that migration . We needed to fix our demographic profile , but migration also always creates economic activities and it fills all those gaps that if you can't increase productivity , you just throw more labor at it .

All those things are too difficult and a painfully low unemployment rate will help Australian businesses to invest big time into AI , into technology , to try to drive up worker productivity , which eventually will reflect in higher wages , which will make living more , more fun , more affordable .

All of this stuff is a is a big shift and I'm very happy that in recent times we had the RBA stabilize the . You know the cash rate and I would nobody Says it , but I would like , in the in the last meeting before Christmas , if there was a no , if you lower the cash rate , I think this would be a very positive signal to the country .

Do you then leave it cruising at this tiny bit lower altitude for a bit longer ? But that's just my Christmas wish list .

So you know , these people who have 60% of all of the cash reserves and the money they're actually getting the better type of return that they've had for a long time , compared to when you know , interest rates are at record lows and they were getting basically zero return on their money in bank .

So it is interesting in terms of and that's the great thing about economics , right , there's usually there's usually a trade-off . You know if one group's doing well , there's usually another group that suffers and you know that's the the magic of this very challenging social science .

So I think they rose the cash rate too fast because they were really obsessed with getting this inflation rate Down to two to three percent and they were they wanted too much , too fast , and that creates panic .

If you were not not panic but a bit of a dissatisfaction , maybe that is a crisis we needed to have , because what I've seen in the and this is where I'm optimistic now I've seen more talk about actually fixing housing supply , making housing affordability a real priority in the media , than I've ever seen in my 16 years in Australia .

So finally the discussion shifts and maybe you need it to , you know , to push it over the edge of it . So of course , it's easy , you know , in hindsight to say they should have done it this way . But yeah , so you know , forever the optimist . I'm , however , very positive , very optimistic that there will be no further increase of the cash rate .

I think that would be setting all the wrong signals .

So we've now moved that savings ratio now down to pre or GF , gfc type Levels , right , and where we're literally not saving our and the amount of money that we've got in banks . So there's no doubt families are hurting . There's no doubt that this tightening cycle has had that effect on spending .

So it is going to be really interesting in terms of , to your point , whether you know we're in contract re-territory . We know that it's by design .

We want to slow the economy down , we want to stop businesses from charging higher prices for us , because what we did find post the pandemic is we had this Huge spike in in savings and we want to dispend it , you know , and no one was going to stop us from spending it , and so businesses were able to pass on their costs Into higher prices and that's why we

got this massive spike in inflation .

This is a saving obsessed nation that is is always afraid to spend money . It's the exact opposite here . People are very happy to Experience life at its fullest immediately and they're willing to spend . So you're fighting a bit of an uphill battle against the national psychology .

But it also leads to more movement , more human movement , as certain big stretches of the world become , you know , unlivable and people will move . Europe will see more and more forced migration from From Africa coming . Managing migration is very difficult . All of those trends In Australia and too much of a worry .

Yes , we'll have much more bushfire risks and so forth , but if , as long as we manage this , we have the easiest to defend borders in the world , it's a breeze to manage this . So all of those big impacts , they are not touching us .

In the 1960s , jeffrey Blaney wrote about the tyranny of distance , that Australia is too far away from all those positive global developments . But by now the tyranny of distance is more of a , you know , of a marvelous mode that protects us from unwanted issues and really helps us to Dictate who can come into the country , into can't .

So population management in Australia will be much easier than anywhere else in the world .

The narrative prior to the pandemic and then the narrative after the pandemic has shifted , on that , how much of that super power is being realized and and how much of a delay was caused by the pandemic for the economic benefits of this country to be realized by by that superpower being in play .

In the first year of the pandemic , instead of taking in 200,000 people , we lost 90,000 people to overseas , so that's almost 300,000 people , most of whom we kind of thought would do some sort of Work in Australia , and now we don't have them .

That contributed very much to the skills shortage and Hence afterwards we were very pleased after the pandemic and from a workforce perspective to amp up migration intake and we've seen in the year the financial year just passed , we've seen the highest ever net migration intake in Australian history , almost plus 400,000 people .

The previous highest number was plus 300,000 people in 2008 , which is when I came to Australia by the way . So this is massive .

This was largely Just pent up demand from the pandemic , because people that wanted to come to Australia they didn't think badly of Australia and in Australia we got a bit obsessed temporarily by talking ourselves ourselves down with our people will not want to come to the lockdown capital of the world or whatever , where I guess China took their title from us and

Nothing in Australia , or the pulling power , the gravitational pull wasn't diminished and in Australia , so people still want to come at high rates and so we can continue to grow by as much as we desire .

The problem that we have in Australia and it's a bit comical , to be honest is that we still have a national Migration policy and the national housing policy that aren't linked , so we can amp up population without ensuring that we have enough housing . That seems like and a bit of an oversight , and and that's why we end this housing affordability crisis .

There's nothing that says we can't operate a successful country with 40 , 50 , 60 million people . We could , as long as we build adequate infrastructure , adequate housing . That is , of course , in a big if , but there's no magic number at which a city can't possibly function , or something like this .

One way would be to say well , from from double to Sydney . Every city times two , we double every city that be away . But we already realized that Melbourne and Sydney stopped functioning under its current one CBD model at around four , four and a half million People are there abouts , so that's probably not the smartest way .

You probably want to grow smaller cities at faster rates . Then you grow the big cities . So you want to make sure that we don't put all of our eggs into the same basket .

Remember , we are the most centralized Population , almost cluster population in the world , meaning there's no country in the world when as high as share of the population lives in its five largest cities . We have over two-thirds of the population living in our five largest cities Before the pandemic .

Over the last two decades , before the pandemic , 80% of population growth occurred in the top five cities , so that means we further densified or further clustered and our population . That's probably not smart . Where would we put those 26 million people ? I would guess they still want to overwhelmingly hug the coast .

So I would therefore expect an absolute boom across the whole eastern seaboard , and that would mean , while we double the population , certain towns that have the carrying capacity for larger Populations should probably quadruple . New castle , beautiful example . Why wouldn't that city Well woollen gong ? Why wouldn't those cities quadruple in those next 65 years ?

These , of course , sound like pipe dreams at the moment , but if you're really honest about what Australia would look like in 65 years , you'd say that's probably where we had it . And then you go at the moment , this whole idea of the you know , the super high-speed rail corridor across the whole eastern seaboard .

That is probably financial nonsense at the moment , but at some point it becomes very feasible and at some point it becomes unforgivable to not have it .

You know , ultimately , in terms of getting into a lift , getting into a lift by yourself would be a unique experience in some of those cities . Or being on a train , whereas we do expect , we do grow up with a sense of space and less density . So it does make sense that when a bigger city does become too congested and too difficult , that why not ?

Why not move along the coast ? Why not get it ? Get ourselves into that secondary or tertiary Location in terms of what that story looks like ?

It's the idea that in Australia we either have New York City , which is the inner city , has big skyscrapers , big high apartment towers , and then you step out of the CBD and immediately you move into quarter acre block territory , which is ludicrous for a European and all Europeans that I ever talked to comment about this in Australia , because it just feels odd and

that has to do with the way that Australian cities developed . And before the cars , before baby boomers grew up , before everyone had a car , we lived fairly in fairly dense cities , in in medium-rise Apartment dwellings , and as soon as baby boomers entered the picture , became adults , they were the first generation for women to enter the workforce .

At scale , australian households went from one to one and a half household incomes . This money was spent on labor-saving devices , vacuum cleaners , dishwashers , but most importantly it was spent on cars . And all of a sudden every family , even of relatively modest means , could Drive the car and just they drove ever further out Borderquake , quarter acre block .

The next family had to drive one block further , and so forth , and so we just sprawled out cities like crazy and Many cities could cope with this for quite a while because you've just built bigger roads .

You channeled all those people into this CBD not all that many people , because you had all those factories in the 60s and 70s and even 80s , you know , in the outskirts of towns or traffic flow was all right , we've . That's how we build cities now that all those jobs this is before the pandemic all those jobs wanted to go into the city center .

Everyone needed to commute into the city at the same time at in the mornings , out of the city at the same time at night . Terrible way of managing traffic that Starship system is . And so we figured ah , a bit more density would be cool . But how do you add medium density ?

If you think about Europe Barcelona , london , stockholm , berlin you picture those medium density four-story Buildings . They're called Euro blocks , technically speaking , and a Euro block all you need is 12 consecutive Quarter-ecker blocks next to each other . You bulldoze that , you build a Euro block .

You got what is , in urban planning Circles , meant to be the ideal density , because you create relatively cool density by throwing people into large Flats we're talking three to four bedroom flats in those dwellings , a big inner courtyard , so you can have a relatively green Model to density . But you can't do this in Australia after the fact .

Because how do you even go about buying 12 consecutive quarter-ecker blocks ? It's very , very difficult with land banking and then doing this . And once you , once you finally Bought all those flats , once , finally all the Greek and Italian grandmothers died at exactly the same time so that you can bulldoze that block .

You , you invested so much capital into that dwelling . You might as well build 50 stories instead of five . And so the medium density dream in Australia is very difficult . So we do , we do a bit of a half-hearted Way of density where we bulldoze a single quarter acre block and we built two , three , twenty , eight crappy townhouses on that block .

That's the best we can do in this , in this model , in our big cities . Along comes the absolute crazy fantasy of mine of Doubling Australia and size over 65 years . And then the outskirts of a gelong , the outskirts of a new castle today Would be the middle suburbs of tomorrow .

So we would , in a very counterintuitive way , the outskirts of those secondary cities . They should be the places to build medium density if you want that .

And of course , medium density needs to be affordable , it needs to be beautiful , it needs to be large and but if I look at the townhouse model that we're building , they are not per se Fantastic places to live in . You can easily stack those places because the kind of greenery that you offer the residents , you might as well give them a big , big balcony .

It's such a small bit of green space that we hand out these days . So I think , yes , you can build better dwellings if you stack them to medium density dwellings , but the only locations where you can build them is the current day outskirts , which will be the future middle suburbs .

Very , very hard to , you know , to justify this , because people are always worried about and is this what the market wants ? Thank God , at the moment the market wants whatever is available , because we have a housing shortage Absolutely everywhere and across the whole spectrum of income and everywhere the whole life cycle of housing has a shortage .

So in a sense , this would be a good time to experiment a bit with these kind of developments .

Because one of the biggest challenges of people who experience inner city , living in , you know , huge urban jungles , is the amount of choice that you can . You know there's multiple restaurants , there's multiple eateries , there's recreational activities , there's gym , the whole ecosystem is thriving .

And then when you move out into a suburban area , oh , there's the , there's the token Chinese restaurant and maybe the token Indian restaurant or Tyrus , but then that's it . And so that whole idea of I can just come down from my balcony , walk around the streets and I've got choices everywhere and I've got variety , I just lack that variety .

And that's that to your point .

What you're trying to argue is , if we get the medium density in around those sort of promenades , in those cold area , and we build from the center out , then hopefully we've got enough critical Variety in there to make those communities point towards those , because we're social creatures , right , that's the you know we're seeing that right now with the , the CBD's ,

that we're struggling to get people into the office . But on a Friday and Saturday the city is booming . Everyone needs that . You know , that interaction we are going biological creatures , social creatures that's what's happening . We just can't get him in the office during the week . Have you got any thoughts ?

I mean , it's probably a nice little segue into talking about what's happening in our CBD's and and our . You know we're turned to work . Is that ? Is that a thing , or what's going on in that ?

That means Each Berlin needs to pay for only the quarter of road and rail kilometers compared to a Melbourneian . So the denser you are , the better streets and rails you can offer to your people . So there is also a certain quality of life that comes into this and also one of the big issues that we have in the car Now .

And yes , there was a covert impact , but it is very much baked into the demographic pie because for the next 10 years we will continue to see the large baby boomer called retire big population called out that's fine , they're allowed to retire . The work hard and also in the past people retired . So it's nothing new .

But in the past when a court retired , you had a equally sized or usually actually a larger court enter the world of work at the other end of the spectrum . This time we got big court out , small court in . That's an imbalance .

As if this wasn't bad enough , we have the millennials Procrastinating after procrastinating for so many years , making babies for the next 12 , 13 , 14 years . That means they leave the world of work , at least temporarily , and because they are the biggest court , and that is quite significant . So the skills shortage is here to stay .

That means we can't simply rely on saying , yeah , we just build all those new roads and you want to densify , you want to minimize the need for for labor . Individual businesses , of course , can look at automation , that can look at AI , but as a system , we need to also become smarter .

If we build more and more houses that need to be renovated in the 30 , 40 years yes , that's bad for the environment or renovated , completely overhauled , pulled down , that's bad for the environment , sure , but it's also and it's expensive , but it's also unrealistic to say that we will have the labor in 10 years time to do all of this .

So the competition for labor will be higher and higher . So that is a bit of a challenge .

It was based around a piazza in a town in I'm pretty sure was Naples , in the southern part of Italy , and the community was amazing . The people were getting involved with the vendors and it created a sense of community . I think that really is an unfortunate gap in the Australian Culture .

So I think that once it's here Geelong and Wollongong and Newcastle , but it's , it's really . How big is the gap in your mind from the existing track that's been laid ? No one's gonna do in the CBD , someone's got to take a punt . It feels like that bridge is is a long bridge to to to get that gap .

But there are few a few of them around . So we all need to make compromises . But the one thing Aussies are not willing to compromise on is the number of bedrooms in the house . This is housing preference . Research shows this absolutely clearly .

We have a strict formula now ahead Bedroom for mom and dad , one bedroom for each kid and if they are knowledge workers , now we need a zoom room study in the house as well . So a two-kid family Needs four bedrooms . If you offer a full bedroom setup as an apartment , as a townhouse , as Whatever , and people will will go there and then they will move .

We know they've changed that adjust their lives Around this . It's quite significant that the people are adopted .

Such a medium density development is ultimately a low risk thing to pull off . It's a couple of millions of dollars , boohoo . You burnt more money in the past . Half of this money will probably come from some federal fund for God knows what . You'll partially get private investors in it . It is ultimately a low risk play .

Plus , you will not burn the whole lot of the investment . It'll make some sort of sense . It's just a matter of is it a home run ? Is it a mean ? You know mediocre success ? I want people to risk it more . We need diversity of housing offering and you know when I talk to people in industry , there is so much of of an appetite for new experiments .

Co-living is being talked about . Built to rent obviously is a whole new Asset class that will enter the market at scale . Yeah , all of these things are coming and in the back we want to think . You know the shift in the mindset of of politics now is they realized supply is the most important thing . They want to amp up housing supply now .

Now it was through , obviously after the Second World War and the men's easier and in through the 50s and 60s that we started to have the Great Australian Dream and that was the quarter acre block as you were talking about , and then the car made that possible In terms of the commutable into the city locations .

So it is coming back to your point before change does occur , you know , but it just takes a little bit longer . You know , if we think , if we think about a yearly change , we can't see much of it .

But when you talk about there a hundred , 120 years of change , we've actually done a great job of giving more people home ownership and housing density now thinks around one , a two , point three , or two point one to two point three . So we've been very fortunate , very , you know , in terms of the economic prosperity that we've had as a country .

That now to to Simon's point into all the research . We want a separate bedroom for each of our child . I mean , back in the you know the 1920s , you were in a almost like a boarding house where uncles and aunties were in there and and the brothers and sisters were in the same bedroom . So we tend to forget about that .

So I think to Simon's point into Our town planners and to our governments They've got to start to think about this higher density story and start to do those changes that are needed In the existing locations so we can get a bit of that backfill and a bit more of that density coming through in the existing locations Because the economy , the economics work that

they saw .

It is very hard to finance an aging population . We were really smart in the 1990s to push superannuation through in theory . If you're well , not the theory if your income is high enough Through superannuation , you put enough money aside that you pay for your own retirement . That is a different way of saying government doesn't need to pay for your retirement .

The pension scheme doesn't need to pay for your retirement . So we want as many people as possible in jobs that pay enough money . So if you get a cheap uber eats order delivered every night yes , it's cool , cheap delivery , congratulations .

But you'll pay for this eventually , as this uber eats driver will not put enough money into their retirement fund with their low income . You will pay for this cheap uber eats order whenever this driver is retired , because you would pay on the pension scheme . So that's one thing is to . We want to automate as many of those low income jobs as humanly possible .

There's a skilled shortage anyways , so we'll not even create hordes of unemployed people . So that's cool . And also the one thing that keeps you safe from um poverty in old age is homeownership . Simply because the Housing costs as a homeowner are much , much lower once you paid off your mortgage than they are as a renter .

So before they go into retirement , we want absolutely Every . We won't get everyone , but as many people as possible into homeownership . So this is why we need a whole different variety of of homes to push people into . That is absolutely Fantastic , because then we don't need to use these . The pension scheme , because that can become incredibly Expensive .

It can't become Biddingly expensive as a nation and , most importantly , it can create social unrest .

If I look at a country like Germany , where there's one big retirement bucket and everyone is putting their money into the bucket as a formula you put that much money in , you get that much money out , but it's one bucket and in theory , government can do whatever they want with this bucket , um , and so at some stage there will be a german treasurer that can do

numbers and they'll realize germany's aging much more than Australia and they'll say we need to freeze pension payouts . We need to maybe even shrink them . And what will happen then , politically speaking ? Yeah , those old , angry people will vote for any charlatan who says we know we'll give you the same pensions as always .

That creates political instability , either either political unrest or financial instability in the system . We avoided this systemically speaking in australia through the super scheme . This is a much underrated benefit of superannuationist this country in this country . So that is really cool . And , of course , at home ownership .

On this , that's fine , which is why a bit nervous if you have a big generation that is , has home ownership at a very low rate , because who's going to pay for the housing once they're in retirement ? It is going to be society as a whole and you want to avoid that . Push people into home ownership .

So how will businesses need to embrace that ? How can they use the current low unemployment environment to To benefit from that ? And what's that ? What's the overall benefit to To people in in the community ? Particularly A message to those who might be a bit fearful of what ai might bring .

But ai is going to change the way we do work . The first observation is that ai will not kill jobs . It will kill tasks , is will . It will speed up tasks , creating a chart , a map that will be faster in the future . You know an annual report will be faster written through ai . That frees up time for individual workers .

Um , but you know to misquote Jurassic Park work finds a way To fill your day , that is , and so the kind of tasks that will fill your day after ai took up a couple of your technical , repetitive tasks . These tasks will be interpersonal , they will be collaborative in nature . So , in a very , very counterintuitive way , ai Humanizes the world of work .

Ai brings us together . Ai makes , ensures that we talk to each other more . Also , this leads to the reason why I think that ai is going to be the saving grace for commercial real estate , for offices , and over the last couple of years .

Well , let's put it this way before the pandemic , um , for decades everything pushed people into the office because we transitioned from a manufacturing Economy into a service , into a knowledge economy . Those knowledge jobs Benefited from being clustered together in the same office .

And then , of course , the , the office tower of accountants , benefited by being next to the office tower full of bankers , next to the office tower full of business people . That created a helpful ecosystem . Why the cbd boomed and long comes the pandemic , and long comes cool technological software that allows us to work from home , and so forth .

So we push people away from the office . Um , then people as they worked from the office , uh , they realized , hey , that's actually better , I avoid the solace drawing commute . And now they fight to the nail to not come to the office all that often . And they also realize um , we , especially the young millennials .

They now moved from the inner city where they lived when they were Not families just yet , they moved to the urban fringe because that was the only place where they could afford family sized houses . Now that they have families , so they now moved all the way away and that's really bad for commercial real estate . Commercial real estate is struggling .

It's going to continue to struggle in the in the immediate , in the immediate future and but now ?

What will happen with AI is that , all of a sudden , you have more excuses to come to the office , more reasons to do so , because if you split your work tasks into two main categories the first category being quiet thinking tasks writing emails , programming , reading stuff you do that at home .

There's no need to come to the office to put on noise-canceling headphones and to then write an email . It's dumb , that's a waste of everybody's time . But we do know that you need to create team culture . By being together , you create learning opportunities from one generation to the next , from one worker to the next , by people coming to the office .

So we know that there will be not a remote working environment , but there will be a hybrid environment , which is why , by the way , you don't need to be afraid that if we work from home , they will just give all the jobs to people in the Philippines . No , they won't , because they can only do the repetitive technical tasks there .

They cannot do the interpersonal , human tasks from the Philippines . Hybrid is the way forward , which is why , at the moment , we see this magical two-hour drive-time radius around the CBD emerging . This is where people sit in because they still want to go to the office or need to go to the office Occasionally . Is it once , is it twice per week ? Who cares ?

But that means outside of this two-hour nothing is happening or those people are not going . But then AI all of a sudden creates more interpersonal tasks . So all of a sudden , each worker B will need to go to the office a bit more frequently . That fills up the office towers bit by bit .

At the same time , simple population growth continues to occur and , yes , the new workers that move into our big cities . They go to the office less frequently than they would have done five , six years ago . But hey , there's heaps more . So eventually the office towers will fill up only thanks due to population growth and AI . Counterintuitive .

But so fear AI not . And you will see technology all over the shop and you will , bit by bit , understand that this technology is actually helping you to free up labor that is much needed , not in a direct way .

For example , if you go to the footy on the weekend , in two years time I think it is unthinkable that a human will check your ticket , that a human will pour your beer at halftime . That's silly . Machines can do this just as well , so why wouldn't they ? And these are big enough entities to make the investments happening so that that will occur .

It doesn't mean that this particular worker that checked your tickets will instead run to the aged care home and take care of people . But this is a systemic shift of jobs and we need heaps more aged care workers . This is a job where we will not have technology help out , as much you know . We will not have robots flipping old people in the care homes .

That's not going to happen . But in a population or in an environment where doubling the 85 plus code in the next 12 years half of that code needs care , we need heaps more workers . All of this AI that frees up work elsewhere is channeling population or is enabling populations to take on jobs in much more needed task categories .

So that will hopefully be our saving grace AI that is .

The one thing that puts counterbalance to that inflation pressure is productivity , and usually you get that through technology advancement and that type of innovation that we've just been talking about , because that is where the input costs become less and so obviously if there is higher wages , pay to those more skilled workers , that's great .

You can accommodate that , but you don't necessarily have to pass on those additional costs in higher prices . You can actually find those savings in higher productivity . I think that's a really good message . I just wanted to tap in also to this city and office culture and business culture story .

I recently had a CEO of a major bank talk about his decision to instruct all of his senior managers and leadership people into the office on a full time basis and his argument to that was around a culture and how can we set the example of culture if you know the senior people aren't ? You know that it's not not a trickle down type culture aspect .

Have you got any views on on the importance of culture in the workplace ? And I know how this relates to , you know again , this sort of reinforces .

This is a property podcast about where do we , where do we going to see demand for property , but I think this reinforces that two hour commute window in terms of that story because , in addition to the story in terms of bringing people in to do that cooperative work using their new co co pilot AI .

Measuring productivity is almost impossible . The best proxy is working time , working hours . We work longer at home , so I would say productivity . I'm discounting this as an argument . Then the culture argument . As you mentioned the bank .

There they say well , in order to create this team spirit , this team culture , we need to be together in a real world , we need to be together in a room , all together as a team , and that creates this culture . That is absolutely , perfectly true and there's a bit of research . When I read it , it blew me away .

That said , yes , you do need to be in the office at the same time as a team , but whether you do this one day per week or five days per week does not make any difference . It blew my little mind away when I read this , because I think I'd surely five times . You know , the time makes a big difference . But then I realized wait a second .

I played social sports with with for many years with my friends , and I hung out two hours per week with a bunch of guys playing futsal and I considered them my best mates . I realized wait a second . So that's probably a decent enough comparison .

So if you do this one day per week , we'll probably do the trick if everyone is together and if you actually utilize this time . The third argument why people say you need to come back to the office is learning , is knowledge transfer , and that needs more than a day .

Simply because if you think back to your early career days in the office , you probably asked making up this number you asked 72 questions a day about the copy machine , about the fax machine , you got notes , whatever the technology was back then , but you asked heaps of questions .

You overheard phone calls , you learned how to write an email , how to book a meeting room , all those things . You learned heaps of stuff . You still ask questions if you work remotely , because you'll have a buddy assigned , you'll have a manager , but you ask 30 questions , whatever it is , the numbers don't matter , but you ask heaps fewer questions .

So what that means is organizations now need to create in a deliberative you know , deliberately need to create those events that just happened magically as a byproduct of sitting in the office . So we probably arrive at a necessity of people coming to the office . Let's call it two and a half days , yeah , so that is needed .

Dictating a full time office attendance ? So that's one way of doing this . It's a very , very dictatorial leadership style . I'm very interested in the staff retention numbers a year in after this . And you do this in a time of record low unemployment where each senior manager of this bank can easily switch to a different colored bank and get the same pay .

Might as well get a pay rise and work in whatever way she wants . Probably it's probably not a smart move , I must say , but I'm happy to stand correct .

In that gap , what's going to happen to the people who had that big exodus and they're now sort of going ? Oh , I guess so let's .

What I mean by this is , if you ask your financial advisor , they will tell you , from a wealth transfer perspective , yes , it is best to hand money from one generation to the next while everybody is still alive . The Bank of Mom and Dad is a way of doing this . I think , for the grandkids , childcare is a way of doing this .

These are awkward conversations with your parents , with your kids , about money . You need to come to terms with your own mortality . These are just awkward things , so we don't do it .

So , ultimately , as Australians , we hand money from one generation to the next when the last parent dies , and that's mom , because mom is three years younger than dad and she has four years longer life expectancy . So all we need and this is coming back to the two hour commuter belt , I promise so this means that we know when those women will be dying .

This is when wealth transfer occurs . We know where those women live . Those women live in quarter acre block type dwellings in the middle suburbs . They will die at an increasing rate . Let's call them instances of intergenerational wealth transfer , to have it less morbid . You'll have about 77,000 instances of intergenerational wealth transfer this year .

This will grow by 60 , 70% and will peak in the year 2041 . So the whole 2030s and most of the 2040s will see elevated rates of intergenerational wealth transfer . This is when the people living in the middle suburbs are dying . What will happen ? Well , they will not have downsized their homes beforehand . They will be carried out of their family home .

I guess that's the ultimate downsizing into the little box . But more than anything , this means this dwelling becomes available . What will her two and a half kids do ? Her two and a half kids will bulldoze the quarter acre block . They will build townhouses on top . They will build a nice luxury house on top . They will sell it for a profit .

This profit they will use to pay down their mortgage . They will then use the remaining money to do what Australians always do when they come into money buy an investment property . All of this wealth transfer will turbo charge the spending capacity In a weird way , leads to the densification through townhouses , mostly of the middle suburbs .

So that means in these 2030s the middle suburbs are , of course , still an expensive area to buy in , so it's not be the young ones that buy in there , it will be the millennials that move to the regions , to the outer suburbs .

That will then see an opportunity to upgrade , because they'll have annoying teenagers by then and they will take their kids and move to the middle suburbs into those new dwellings . So you have the highest movement . People stay in homes much shorter in the 2030s than they've done in the past because there's so much new stock coming online .

So this allows society to right size the housing , especially if we kill stamp duty by then and have a land tax , because then there are less hurdles to change houses . So you'll have this biggest migration internally in Australian history ever .

And if , let's say , you are a mortgage broker or a real estate agent , you by now should have fainted with joy of this prospect of the 2030s .

You're actually borrowing $1 to $2 million because you've just had that wealth transfer and ultimately and $1 to $2 million are going with your incomes your average income might be in that sort of 140 , 150 , 160 double household income . So you've got average household incomes $300 , $350 . Some people on $400 to $500,000 .

This is why land value use and productive use of land in terms of changing it from a single use to a double use , because what Simon's also highlighted in that is , the parents who have the two kids it's not just one of the kids gets to .

Let's do a substitution of house , because I'm sitting there with my new wife and my kids and I want to go and live in Hawthorne , but I've got a sister or a brother who also has their family and they would love to live in this . So to stop World War III , it's basically we're going to have to sell that house and then realize the profit of that .

Now one of us might buy the other one out and then knock that home over and build their own dream home or renovate these . But that's the sort of that's wealth on wealth effect . Right , that's the compounding effect in real numbers in human action and human behavior compared to just everyone looking at . Compound just won't work like that .

Well , I'll tell you it does in real life .

You want to decentralize jobs a bit more . All this is written in policy . We'll see whether this actually eventuates , but it suggests a very dynamic Australia , and so this is also a friendly reminder to everyone that this is a very agile country .

Your suburb will look differently , I don't care where you are , but your suburb will look differently in 10 , in 20 years . There's always change , and if I'm looking at our young people that lived through the pandemic in their formative years so school-aged kids and teenagers and so forth they will be very , very capable of dealing with change .

So because we say what happened in your formative years that changes your worldview or shapes your worldview in a lasting way . So I'm very pleased that the young people probably deal with this in a very good way , but us more experienced people we need to be aware of there will be change . We need to be very , very comfortable with change and it's a given .

So don't fight it . Just try to understand what's happening . Try to always channel change , channel growth into the most effective way . Growth doesn't need to mean that life for you will suck . It can just mean that life ultimately improves .

But you need to work on it , because if you just become Yimbis yeah , they do need to become- Yimbis , and I think that's a really nice way to close out this conversation .

Now we thought maybe the 2020s were going to also again be another period of the roaring 20s . Well , we're coming into 2024 probably in a position where our economies are slowing . We also saw from our national accounts figures that , per capita , we're actually in recession .

So it's only been that migratory increase of people that's actually increasing economic activity to get us the 0.4 or 1% growth rate that we had in the quarter GDP .

But I think it's just a really great reason why we get people like Simon , who are experts in their field , to come on to the pod to just lift our eyes and to start thinking in decades , not just thinking in years , because it sounds to me like the 2030s and the 2040s , with this wealth transfer , this intergenerational wealth transfer , are going to be the

roaring 30s and 40s in terms of what that story might look like . But we've got to embrace this change . We've got to accept that we're going to have higher densities in our existing areas and our property neighborhoods are going to look different .

And to me it's like again I keep coming back to land , to asset ratio If I can put three or four improvements on a piece of land and get its higher productive use where I want it , that is going to make that land worth a lot more expensive and potentially higher yielding for me as well . So , simon , I just want to say a huge thank you .

From my point of view , you might have one last question , but before I wrap up my piece , you've got a brand new book out , coming out in early October , called Marvelous Maps . I don't know whether you've got a copy of it there , but oh , there , it is Okay . So a nice little plug for this .

If you follow me on my social media channels , you'll see that I constantly share maps that explain how the world works , and the idea is that by just constantly consuming this information , you gain some sort of background knowledge of what's shaping this planet and that will ultimately make you a better decision maker in all things really that impact business or policy

and so forth . Yeah , or property investing .

My final question is challenging because I don't want to wrap up is the honest truth I've had multiple conversations with you over the journey , simon , and every time I get something new and insightful and further reinforces my optimism about this country and the opportunity that we have . But what would you say to the ?

Ben and I get a lot of people right into us saying , yeah , you guys keep talking about the and , largely on the back of insights from you and Bernard and the like , you guys keep talking about the roaring twenties , but the last time we had the roaring twenties it was followed by the Great Depression . So I feel like in the 1930s , right .

So I feel like we've covered a lot of ground today . That , hopefully , will give those pessimists a bit of comfort about why that is . But what would you say to someone as a summary point and a way for us to finish this conversation , for someone to say history says the last time , the 1930s weren't that great . Why would the 2030s be any different ?

So it means that is it not all that easy to get enough capital for your new Googles and Facebook type startups ? So that's you know . That sounds like a negative story , but it means who has lots of boring investment opportunities . It is a stable democracy like Australia .

On top of this , we realized because lots of people are pessimistic about the future because of the environment and they say we're burning through the planet . We're just , you know , we can't live like this . Limited resources , finite resources and so forth .

So , yeah , I get that , but the absolute counterintuitive gift that Australia has to offer over the coming decade is mining . Mining is , of course , how we make money . We run a super simplistic economy in this country make money by selling mining products , agriculture products , education and tourism to the world .

That's all we do in this country and all of this will be fine . In the coming decades , new prices will go up globally . Terrible news for the bottom two billion people on this planet . Great news for any food exporter . Back to mining . We are realizing as a population , as a global population , that we need to green the planet .

We need to electrify the global transport network . We cannot go on with this fossil fuel economy forever onwards . So what does that mean ? It means electrification . Electrification means you need to put batteries into your vehicles to make the world move . A battery needs eight essential mining products . We have those products in this country .

The demand , the price for those products , will go through the roof . We will benefit from this as a country . Our products will not just be in demand because they are in demand to begin with . They will be in demand because those mining products , they are distributed across the globe , yes , but not evenly , and they tend to not be clustered in stable democracies .

There are precious few stable democracies that have a mining wealth on offer . So , just from a supply chain sovereignty perspective , our mining will be in high demand and the perspective that we have on mining will turn almost 180 degrees from a dirty evil , polluting think brown coal , think oil type industry to the industry that makes the Green Revolution happen .

It is bizarre to think about this at the moment , but that'll benefit us From an environmental accounting perspective . We have a couple of challenges , because whenever you dig a big hole in the ground , you kill an ecosystem . There's no discussion about this .

So environmental accounting needs to make sure that we say , for every hundred ecosystem pain points we need to create let's call it 150 positive environmental points . You see why I'm getting there . So that's absolutely crucial . We can do this . The big challenge for Australia in the coming decades will be to capture this mining wealth in a smart and equitable way .

I very much would favor a Norwegian style or a Singaporean style sovereign wealth fund for our mining profits , so I would enjoy that .

Oh mate , how good was that . You know it's funny , I have these predetermined ideas of where I think the conversation might go , because I spend a bit of time I revisit the previous conversations . I go and see what's relevant . But some of the stuff we talked about even I wasn't anticipating and I was so glad that we went there .

gonna double by 2065 ? We've got all this interesting technology that's gonna make us a lot more productive . Where does that take us in the world ? You know ? What is it gonna mean in terms of the overall intergenerational wealth transfer ? I'm gonna be talking more about that in what's making property news . I've got some data on that .

So it's yeah , it's just a solid story to just remember , to lift our eyes , think in the decades , think in the long term , and when you start thinking like that , you can just get on with your life , not worrying about your investments , which comes back to your initial life hack point in terms of do these things really well ? Boringly well .

And that's the thing I love about property investing right , it is a small business , but it's a passive . Investing small business Like it doesn't require a hell of a lot of your time you can go and set up a cafe and make 500,000 coffees over the next sort of 20 or 30 years , and that's required .

This is a really nice business that you can run on the side like almost like a life hack or a side hustle . Where you can run that business , you have a property manager helping you out , you have professional advisors who are helping you out , but it's just , it's value adding . You know , and I just think you know , look at Berkshire Hathaway .

At the end of the day , berkshire Hathaway , what's their business ? They buy other businesses and they let their managers run those other businesses and it's one of the richest businesses in the world . So , and they're passive investors in those businesses . So it's just . You know , success leaves clues and you know .

That just reminds me of what is a really , really good story .

He had this like if you imagine , this cross in the map and he said this was the center of Australia , based on population , equal North , equal South , equal East , equal West . He was talking about baby boomers , it was .

I found it fascinating and I don't think you know , we've spoken to Simon , we've spoken to Bernard , we've had Simon speak to our team , we've had feedback from our team that everyone just seems to be fully engaged .

Whenever people like him are talking about how we move and what we're doing , it's kind of I don't know what it is about us humans , but we just love to look into the future and see what that looks like .

So , and folks , if you , I remember Bernard did a talk just before I can't remember when it was , if I'm honest , but it was in the naughties that I saw and he said wherever there's noise , go to the facts . Right , and I've now used that as a guiding philosophical principle in life for property investing wherever there's noise , go to the facts .

And so we're in a period of extreme noise right now . And so , wherever there's noise , go to the facts . And as soon as you listen to what he said , you know the fact that by 2080 , there's 52 million people there's . You know , just the next two decades alone will be super exciting the fact that we are the most clustered population in the world .

So when you arrive in Australia , you hug the coast , you stay in those five main capital cities . There is just so much to be excited about . And then he goes . Well , if 26 million people are coming here , where are they gonna go ? Are they all gonna go to ?

No , they're gonna create these Euro blocks and these other areas and those other new satellite cities . It's just exciting . It's just exciting to observe and watch .

So if you're wondering if you should be investing in property , I hope that that conversation leaves you with zero doubt that as you get to 2030 and you do the customary rear vision mirror review on did I make the right decision ?

Did I make the right choices , if you put your name on a title or two in that decade , chances are you're gonna think I'm glad I did that .

You're trying to look for that arbitrage opportunity and if all of these people need to move here , they're all gonna have to live somewhere , and that's the productive use of that land .

And then ultimately , when you're thinking about the doubling of the size of our population , you're thinking about the economic activity that that creates and the economic growth and the wealth creation that comes off .

That is a significant story that obviously gives really good , strong , predictable probability that property prices and land values and those things are gonna keep growing and you're gonna get a return on that .

Previously he and I had a conversation in episode 353 when you were away . Then you mean him had a conversation episode 314 . Then we spoke to his business partner , bernard Bernard Salt . That was episode 334 .

And then , way back in episode 185 , you and I had a conversation Remember this , ben Mark McCrindle he was in the studio with us as well had some amazing infographics , had similar conversations around demographics . These people love numbers and love turning numbers into stories and they're really , really insightful .

So what we're gonna do is we're gonna drop the links to these past episodes into the show notes , and my life hack for people today is go and absorb them . Go and have a listen to them .

Some of the conversations we had back then like episode 185 was a long time ago , but listen to some of those trends and patterns and see how they've come about and what they've actually meant for property investors and how they've actually flowed through , because these guys are just saying we have life cycles .

We're born , we know our date of birth , we roughly know our date of death , based on averages , and we roughly know the typical things that you're going to do in your lifetime . And Baby Boom has had a different life cycle to us , as Gen X to Gen Y Now millennials have got different life cycles .

So they just make these reasonable predictions based on reasonable assumptions around what people are gonna do at what stage of life . So that is my life hack today , ben , I think you'll be glad you did go back and revisit those episodes . What's making property news man ?

And so treasury that's obviously a federal treasury of this country has already reported that the Baby Boomers and remember , in a lot of cases there's upwards of 5,000 people a week who are retiring right , so people need to put that into context . They're getting access to super .

So there's already been $1.5 trillion worth of intergenerational wealth transfer from some of those older Baby Boomers . But that is about to Simon's point . Based on the Productivity Commission and NAB National Australia Banks research , that's gonna be $3.5 trillion over the next two decades .

That doesn't mean that loan volumes are gonna explode . It just means some of that wealth is gonna be .

We're gonna start thinking about wealth from a family point of view and how we basically make that wealth transfer and we start thinking about what we do as a family , generation by generation , in protecting that wealth and potentially growing that wealth over time .

Then Cause a lot of people go and say property prices cannot continue to rise , ben Bryce , because the DTI says that it's not gonna work when our incomes won't grow at a level that will allow the property prices to grow , and so hopefully there was just this big aha moment .

That's people are listening to this , going , oh right , it's not gonna all be debt funded , it's all gonna be part of equity passed on through generations which will form part of the ability to buy for people at higher prices . And throw that in the mix where we've got more people who want to live in these houses and we have stock available .

Hopefully that was the aha moment for a lot of people , because they go when they do the projections and they go 7% . It takes 10 years to double and then double again . They look at that . It's mind boggling . I just can't see it happening . Hopefully that was a penny drop moment for a while .

Then you'll potentially go to a town house and if you're fortunate enough or you've got a wealth transfer happening , you'll go into a property in those mega cities . If you think about what Paul Ryan said about the gravitational pull towards the mega city , that won't stop right .

Like you know , when we think about Melbourne and Sydney as population centers in that sort of 5 million , 6 million range , in global terms they just fall out of the top 100 cities in the world in terms of populations .

Like , there are mega cities and in those mega cities we need to look at the land value and what they're building on those and the productive use of that . And then you start thinking about where all the mega successful people live . They live in certain communities , that land value , all of that .

So that trickles down and we call it the ripple effect in terms of land values across the nation and all those things . So that does mean that in some cases , the Adelaide's and the smaller cities , the Geelong's and the Peninsula's and all those areas will continue to grow based on the affordability story in those bigger centers .

So those people who are fortunate enough that can live IE in the New York's or in Paris's or the London's of this world or , in our case , the Sydney's or Melbourne , that'll continue .

But there will be these other centers which will be more affordable , now that the incomes that you earn in those centers won't be as large as what you can earn in these mega cities . But that's just a choice that you'll get to make in this great country and you've got to think about it like that .

And from an investor's point of view , there will always be opportunity in all those different markets . So it's really about your own investment strategy in terms of what you would do as part of your story , in terms of where you would invest and why you would invest in those locations .

Someone will listen to this episode in the future , ben , two years from now , right , and then the circumstances will have changed , but the people who are listening to it now .

You have been warned that you can get an opportunity to buy into a marketplace where Tim Lawless has just told us there's probably gonna be a little bit more stock on the market in spring , and you can do it whilst the masses are still a little bit nervous .

But as soon as it ticks into 2024 and then it gets the run going , don't say that you weren't warned . Simon's warned us today . We've talked about some of that . Now there's an opportunity for you .

There will be a point where you look in the revision mirror and you go , oh , there was an opportunity for me to be able to afford real estate back then and I didn't take that opportunity .

So it's always been fun . It's always fun having chat with Simon . Always good hanging out with you , mate . Until next week .

If you're new to our community , I want to encourage you to listen to our very first 20 episodes , as the concepts we share in EPS One through 20 are foundational principles , pillars and frameworks that you need to know for you to get the best value from our content week to week on our show . My little tip is to listen to it at one and a half speed .

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