Juggling Dynamite

Cash-strapped retirees are increasingly looking to liquidate real estate in exchange for cash and rental accommodations.  This trend is likely to continue for the next decade-plus and exert downward price pressure on elevated property markets all over the world.

This will be particularly felt in places like North America, where an aging population of present homeowners, low investment yields and insufficient savings (aggravated by some of the most expensive housing in the world), are quickly changing the dream of homeownership into the dream of less overhead.  Meanwhile, highly indebted younger people have a similar plan.  This leaves the question of who will buy the present inventory of super-expensive housing?

At some point, the cost of renting will no doubt rise to the point where homeownership is relatively cost-effective once more, but not before the price of homes have corrected considerably.

See More Americans are ditching their mortgage to rent in retirement, and it shows how their lifestyles–and finances– are changing:

Before Joe retired in 2016, they lived in a 4,000 square-foot home in southern Washington. It just wasn’t for them anymore.

These days, their home is a six-foot by seven-foot overlanding vehicle they use to travel the world, and they plan to rent something more permanent when their adventure is over.

The couple wanted to start living their retirement dreams sooner rather than later, and found that selling their home was the best way to do that. “Selling the house wasn’t so much a strategy as it was a necessity. It was the only way we could retire early,” Joe says.

For this couple and a growing number of retirees, a combination of lower expenses, freedom, and flexibility are making renting more alluring than owning.

This debate is well articulated and highly relevant as we enter the 2020s.

The Munk Debates podcast is an extension of the main stage events – in subject, speaker selection, tone and format. It will introduce the iconic brand – and its engaging debates about significant issues of our time. Audiences will hear strong and passionate arguments from both sides of an issue so they will have enough information to make up their own minds about where they stand.

The Australian Federal Government has so far refused to acknowledge Australia’s exposure to the effects of climate change, arguing the country’s insignificance in terms of global emissions as justification for not developing a climate-action plan that transitions its reliance on fossil fuels towards its abundant renewable resources.

“Australia is politically dominated by climate change trivialisers … they’ve always assumed that sea level rise would be the symptom, and Pacific island nations, who don’t matter, the victims. Now with the bushfires, the populace is realising that Australia may be the first victim.” –Economist Steve Keen

The good news is that Stanford’s Solutions Project has already worked out the specs and investment steps needed to transition Australia to 80% renewable energy by 2030 and 100% by 2050 with an estimated investment needed of US$820 billion, while the crushing costs of business, as usual, compound daily.  See A Green New Deal for Australia.

Mark Jacobson, professor of civil and environmental engineering at Stanford, and the co-founder of the Solutions Project — a US not-for-profit organization that works to educate policymakers and the public about transition to 100% clean, renewable energy —  explains the massive expected reduction in energy demand when all sectors of the economy are electrified in this 6-minute video.