It’s been a big few weeks in the Fitzgerald household.
My wife Hannah and I welcomed a baby boy named David three weeks ago. Both he and his Mum are healthy and happy, and we are enjoying all the ups and downs of being new parents!
I’ve found myself thinking a lot about the world my son will grow up to live in.
When I was born in 1990, there were 16.8 million people living in Australia.
Today, there are 26.4 million Australians – an increase of 57 per cent in 33 years.
My son will be 33 in 2056 – could Australia be home to more than 40 million people by then?
When I was born in 1990, the median house price in Australia was $140,000.
Today, the median house price is $850,000 – an increase of 500 per cent in 33 years.
Could my son be facing a median house price of $4 million when he is my age? Will people even live in houses on a block of land when our population is more than 40 million?
These are crazy questions to try and comprehend, let alone answer.
Supply of housing is one of the biggest challenges Australia faces over the coming decades, particularly if our population continues to grow.
Just this week, The National Housing Finance and Investment Corporation (NHFIC) predicted 268,000 more people than previously forecast will migrate to Australia between 2022 and 2024.
At the same time, the NHFIC predicts net supply of new houses to drop to 138,100 homes annually from 2022 to 2025, down from the 180,000 it predicted this time last year (when rates were 3.5 per cent lower than they are today).
The downturn in supply at a time when population growth is surging has widened the predicted housing shortfall from 62,900 to 106,300 by 2027.
NHFIC estimated that 377,600 households were already in situations of housing need, 331,000 households were in rental stress, and 46,500 households were experiencing homelessness.
With interest rates as high as they are, and the building industry still grappling with supply chain challenges, it’s hard to see rents and prices of housing continuing to increase for the foreseeable future.
For me personally, the arrival of David adds a whole different dimension to the goals and dreams I have for myself and my family.
My goal when I first started investing and building wealth was to own my own home debt free, and never worry about money for the rest of my life.
In these past weeks I’ve found myself wondering if I can set my family up so that the next generation can afford to own their own home. Wondering what I could be doing to not only ensure I never have to worry about money for the rest of my life, but to also ensure my kids don’t have to worry about money in their lives.
I’ll have to teach David the habits of good money management and ‘Bulletproof Investing’ one day. His generation is going to need it more than any other generation before it.
But he is only 3 weeks old and doesn’t speak English yet. So, in the meantime, it will be important for me to teach with my own actions and habits.
