Episode 132 | The societal impact of Covid-19 and its effect on property prices | Mark McCrindle, McCrindle

Understanding the complex nature of how the social fabric has been altered post Covid-19 and consumers behaviours
Welcoming back social researcher and demographer, Mark McCrindle, Founder and Principal of McCrindle, a prominent research house that uses data and trends to create strategies for leading brands and businesses. In this episode our hosts pick the brains of Mark to understand the full extent of Covid-19 and its impact on society and how it has altered consumer behaviours on both micro and macro levels.

Here’s what we covered:

• The similarities between Covid-19 and the past economic crisis.

• What will potentially happen to the social fabric post Covid?

• Which generations will adopt new practices and who would be adverse to change?

• How will zero migration impact property prices?

• How long until migration goes back to normal rates?

• Will tourism in Australia bounce back? Will it be restored by domestic tourism?

• Will the lack in international tourism increase the need for a high-speed rail system?

• How will the work from home movement take over?

• Why is it in the first time in a century people per household has increase

RELEVANT EPISODES:
Episode 76 | Mark McCrindle
Episode 130 | Glen James
Suburb Trends July, 2020

GUEST LINKS:
Sekisui House - Exploring the benefits of apartment living.
CLARA - Is Australia ready for High Speed Rail?
The Urban Living Index - Measuring liveability of Sydney suburbs

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT: 
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in July, 2020.

Veronica Morgan: Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyers, agent cohost of Foxtel's location, location, location, Australia, and author of auction ready.

Chris Bates: And I'm Chris Bates mortgage broker. Before we get started, I need to let you know that nothing we say on here can be taken as personal advice. We always recommend you engage the services of a professional

Veronica Morgan: A few weeks back in episode 130, we spoke with futurist Craig. Rispin about the technological changes that are happening in our world right now, innovation that will dramatically change the way we live, where we live in the buildings we live in. And this week we're going to further explore this theme and look at the demand side of the equation, how we humans are adjusting our priorities around where and how we live and not just because technical innovation enables it, but through something deeper social change, anecdotally, we've been hearing of a migration away from urban centers, C and tree changes brought about by a stint, working from home and a reassessment of what matters to us is this the beginning of a groundswell, will it fizzle out when things get back to normal? What are the changes can we expect to see as we head out of lockdown today, we're talking with demographer and futurist Mark. Mccrindle who you may recall. We met with back in episode 76, well worth going back for listen to see if some of the things he predicted back then are coming into fruition. Yet Mark is an award winning social researcher, bestselling author, and influential thought leader. We're very excited to be discussing the future again today with you Mark, and thank you for joining us.

Mark McCrindle: Oh, delighted to be with you. Thanks, Veronica. And Chris. Okay.

Chris Bates: Could I, Matt, thank you so much for coming on because I absolutely love your work. And I mean, just as a social researcher this kind of COVID experience, I guess, has been lots of people who have been really affected by it, putting that to one side, how has it been as a social researcher to kind of sit back and just watch things unfold?

Mark McCrindle: Well, it has been fascinating because these are rare events and fortunately they are so rare, but the reach of this has been phenomenal in terms of a global nature of a, of a pandemic like this. And the depth of its impacts in our lives has been phenomenal as well, because it's trying to everything from how we shop to where we're learning or working through to our social interactions as well. So it has transformed so much, which does make it a fascinating time for social research.

Chris Bates: Is there a time in history where, you know, as someone who's kind of always looked back to potentially to look forward where you can see a similar event, maybe not a pandemic, but something where society is really taken another different direction that we can kind of look as a record.

Mark McCrindle: Yes. The, the, the field that we've got and the ripple impacts through the economy are a little bit like what we get in world Wars and a little bit like what we get after great depressions of which, you know, again, fortunately we have not had in any of our lifetimes, but those older people do. And you look at history as well, do start to see some, some similar patterns, you know, that, that it it'll flow from one country to another, that the recovery is often slower. That is the economic recovery, that changes sentiment, that heightens fear that people bunker down. But over all of that, you've got the health side of it even beyond the economic and social side. And so that creates the extra dimension.

Chris Bates: And so what, what if we're going to look at the wall is what was some of the things that yes, you said longer, but what were some of the other, I mean, it was a baby boom, I guess was one of the things, but what was some of the other things that you think we potentially might see that was similar to

Mark McCrindle: Was well in the dock dies of the Wars and, and, you know, the, the recovery time after we did see things like fear and sentiment on the challenge, we saw people reprioritize their lives and not worry as much about just climbing that ladder because more important things were the four like survival and family and safety, and those values did get a reprioritization as well. You know, I remember in the 1930s, the twenties and thirties, it was party time in the 19, late thirties and forties, suddenly things got very serious. And and so it did give that reprioritization and it did create longterm values in that generation. We call the greatest generation values like financial conservatism and a focus on the long term and being prepared to save and, and work hard. And all of that created them to be the greatest generation and to go on, to produce what they produce. So I think that similarly with the younger generation of today, they will have a four to tutor resilience and a character forging in this time that will serve them for the rest of their lives.

Veronica Morgan: And you could argue that we were due for it. I mean I know that we've worked had over 30 years without a recession in Australia and obviously in Australia, we've we really survived or dodged double, or I guess the post GFC hardship that a lot of other countries Um you know, our consumerism has been up you know, it's, we've had, we've had a good life. It's been fun and the climate suffering as a consequence of that. So I guess you could argue that this is something that we really needed to have. But I guess, do we think, or do you think based on your research that this is still enough of a shock and that we will change our sort of our attitudes or our thought processes permanently, or at least for a generation, or do you think maybe we're a little bit short term with a little bit too short term and we will bounce back relatively quickly?

Mark McCrindle: Well, I think some things will return to how they were, but a lot won't because of the impacts of it and the extended nature of it. It hasn't just been a day event. You know, it hasn't just been a blip it's been extended and with some second waves and the light will roll on and other countries going through it at a different stage. So it has been global in its impact. And while the older generation have been through recessions and cycles before not the younger ones and, you know, the age at which you're exposed to a massive social event, determines how embedded it becomes in your psyche. And so I think that it will change the younger generation for the good, you know, think about a lot of the labels that were pinned on the millennials, proud of this, you know, they're that self regeneration they're, they're fickle, you know, they're just living for today. Well, not anymore, you know, and it has given them a real reality check that actually stock markets go up, but they also go down. Volatility is something of a new normal jobs aren't guaranteed, you know, hanging onto a job job. Security matters. Savings are important for a rainy day. All of those timeless values have been reinstilled for this generation.

Chris Bates: It's funny you say that about gen Y. If you think about what are you saying that potentially generations that are a bit older gen X, baby boomer, et cetera were potentially more likely go back to how things were, but the younger generation of really, they kind of think about it a lot more deeply and potentially get affected a lot more. Would you say that or is that not right?

Mark McCrindle: That's exactly right, Chris. We've surveyed twice now through Kogut on the way in, and, and just in the last few weeks on the way out. And anxiety was the number one sentiment across Australians, but it was far higher in its precedent in the younger generation, those in their twenties then than the older generations, again, because the older generations have some bigger context, some broader life experiences. They, you know what, this too will pass the younger generations. This has been a deepest shock. If we look at the economic impacts it's generation, Y that say that it has had the biggest impact on them, 37% say the economic shocks have been, have been significant. Whereas, you know, the oldest generations, again, they've got a little bit more economic resilience and being having a wage cut or some hours cut for a while, they feel that they will bounce back on the mental health side. It's even been bigger with the gen Z kids, those in their teenage and early twenties, because wow, the isolation, the loneliness that the social impacts upon them are at the young age have been significant. Indeed.

Chris Bates: What's what years Jen said that they start a house. What's the youngest Gen's ed at the moment.

Mark McCrindle: They were, the youngest was born in 2009. So, you know, they're just moving into their teenage years. Yeah.

Chris Bates: And so that generation, cause it's interesting to think through because time moves pretty fast. Right. So you know, gen Y weren't seen as the driving force behind the labor market, the property market, but they're pretty quickly got there. What are some of the things you think longterm they're going to be impacted on and, you know, do you think they'll, they'll reassess everything a little bit because they've kind of, didn't go to school and et cetera.

Mark McCrindle: Yeah, definitely. And I think that's where your, this has been a great a reality for them. No one would wish a time like this, but just like we have our winters season wise, you know, you need your winters along with your summers because it does, you, you you're just, you're, you're, you're, it builds a bit of resilience. So I think that's going to be the case for them. They have seen digital transformation. In fact, it's, I should say digital transformation and for all of us, but you're at such a young age suddenly they realized, well, actually we can learn from home. And they've seen parents working from home and they've seen the ability to adapt and collaborate even in online environments, build the social connectivity. That way they've seen that we can bounce back from this. They see that again, your jobs and the security of that does matter.

Mark McCrindle: And I think that all of that will forward this, this, this character in them will help them be adaptable, nimble agile, because you have to be in this era and they through the technology will bring solutions in all of this. You know, we're not going to want to do as much push buttons in technology in, in the future, you know, in shared spaces or in lifts. So gesture control will come around. We're seeing more contactless pay. And, and the point is that this generation that is digitally savvy will bring about innovations in a postcode world that we will all benefit from.

Veronica Morgan: You mentioned earlier, Mark, that you surveyed a gen Y in particular sort of moving into this. And you've, you've been serving them along the way I'm gathering. And you said that the anxiety was, was very prevalent in that generation, is that lessening because they're starting to see that they can actually digitally or do things differently and digitally, or is it, is it fairly static?

Mark McCrindle: It is changing. And when we're in the dark days in March anxiety was the number one sentiment for all Australians. Hopeful was a distant fifth. I'm happy to say. Now that hopeful is the number one attitude for the older generations, the younger ones still have anxiety. And then hopefully that is because there's a sense of frustration and uncertainty about not the physical impact of this, but the economic impacts the job pathway, future study opportunities. You know, they've got the world before them. They're at the point of life where the big worries are, should I choose this job or that job, or, you know, I've got three courses I could possibly do this change, all of that. Now we're, we're in a blessed splice as a nation where the, the number one impact we're talking about are economic impacts or social impacts, not health impacts. And that we've got to keep that in mind. That's the least of the worries. Only 13% said that that's a concern for them far higher, where the other impacts, but nonetheless, those other impacts are significant and will be long lasting for the various generations.

Chris Bates: And if he's saying, I guess like the longer term impacts, I think the trends that, you know, the different directions or the different tracks that we take as a society, you know, things like migration, do you see, you know, what have you, is there any research that you've seen or any that kind of can give us an idea, whether he'll go back to like, what was whether it be dramatically reduced longterm or whether it would actually even be higher?

Mark McCrindle: Well, it's having impacts now and we'll see it over the next year. When the demographic data, the population data comes out, comes out quarterly, but it's because we are so aligned near two thirds of our population growth is normally from net migration. It's going to have a dent on our population growth. That's going to slow that down. That'll be particularly evident in places like Sydney, which has really been relying on migration for its growth. In fact, Sydney, if we just think within Australia loses more people to other parts of Australia. And again, so it's been Sydney actually goes backwards if we look at the internal side, but bolstered through overseas migration and it, and we're moving from now one quarter into the second quarter of that stoppage of, of that migration. So it will have impacts. And as that demand is a bit slower, it does have a flow and impacts around pricing and other things of property.

Mark McCrindle: But but I think in the longterm, you know, Australia remains a key destination for migration. In fact, how we have handled covert the fact that we're talking about economic, not physical health impacts tells us that we have managed this extremely well. We see that this has been global brand opportunity for every country to match themselves against another and see how well they flattened the curve, or here we smashed that curve down flat. And yeah, there's a bit to go yet. We'll see where it flows out, but we have done so much better than almost every other nation. And that is a great positive in the global brand side of it. And this will therefore remain a key destination country. So migration will come back. But it might take a couple of years before those borders fully open towards that.

Chris Bates: A big part of that is the private schooling sort of you know, high school sort of tertiary education you know, migration to Australia. I mean, is there been a lot of, do we become more desirable? I know you're potentially slipping, you know, in desirability around the world, but do we become more desirable because the health isn't a concern side of their parents sending their kids here as much. You know, do you think longer term with universities and things like that, that, that potential gets supercharged off of something like this?

Mark McCrindle: Oh, that's right, Chris, you know what parents look for when it comes to sending their children who live here year after year during their school or high school or, or university period is they want safety and they want economic stability and they want a possible pathway for a future for their children as well. And the strategy, all of those boxes, the other big migration category is skilled visas. And we're gonna, you know, it's going to take us a while to get the education back on here, and it's gonna take a while to get the skilled visas back because we are dealing with not quite double digit unemployment here locally, but towards it. And the government is not going to have any great incentive to bring workers in from overseas when we've got our own employment challenges here. So we, it is we're talking years, not months before we see the migration numbers, get back to close to what they were

Veronica Morgan: And talking about education. I mean, obviously recently there's been a change to the fee structures around out tertiary education and with an emphasis to try to get more students entering into the professional or the degrees that lead to professions or to actually employment sort of quite interesting, isn't it? And obviously the big furor is around the increase of the cost of humanities, degrees of the inference being, it's not as easy to get a job once you've got one of those degrees. What do you think about that?

Mark McCrindle: Well, yeah, the government is always using signals of various forms to try to encourage people into certain areas, you know, because we do have some shortages in, in key areas. I mean, probably the area where we have a biggest shortage is not just in those STEM areas, around engineering and maths, but in the actual skills forget uni, you know, it's the skills of the trades and the apprenticeships where we're running short because, you know, not everything can be digitally solved. Not every job can be filled by offshoring to another place. We need local young people to be skilled up in these, in these trades. And so I think the vocational education system needs a bit of focus and there's, there's more attention being placed on that. But as for the, the, the shifts in degrees, I mean, I can understand that the government response that, you know, some of these generalist degrees don't lead to a direct pathway, but the, the other thought is that the whole employment world is changing and so much is learned on the job.

Mark McCrindle: Anyway, in fact, somebody's jobs are changing year by year. You couldn't possibly be trained up for it in a university degree, which, which degree is not a generalist degree these days, you know, engineering side they're generalist as well. So I think, you know, university study is great because it gives us broad knowledge. It gives some, some experiencing preparing in, in assignments, in, in, in being well-read in, in being in setting goals and achieving those. But other than that, you're most of the meaningful contributions we make in our career, those skills are learned on the job,

Chris Bates: I guess. Yeah. It made studies part of it, little get our economy booming around tourism, you know, people coming from overseas here, but also internal tourism, you know, us traveling within the country. What's your thoughts on how that will bounce back? Because, you know, there's, I guess there's a bit of a myth that we really need the overseas tourism when potentially a lot of it's driven by internal

Mark McCrindle: Well, that's right. And, you know, Aussies love this nation, you know, and we love to explore our backyard. And and we've had a long tradition of that now with cheap flights over the last 20 years, we have seen us, us and overseas more, but, you know, there is so much of our own continent to explore and, and how, you know, it's harder to fly out of Australian air, great Australians don't need too much of an incentive to do the big lab or to to pack the Tyndall, the caravan and go exploring. We're also really well set up now with sophisticated infrastructure for, for some, some higher level internal travel. You know, it's not just the motels or the caravans now there's this quality not an accommodation, but tourism options within this nation. And I think we, we will see a bit more of a resurgence of local tourism of, of seeing our own nation and not just, you know, in that retirement gray nomads space. And we need the grain home ads to pack up and do those six months trips. But but just all of us, you know, traveling a bit more locally and seeing some of these globally renowned regions in our state or the one next door and and really exploring our own country,

Veronica Morgan: We sort of leads to how do we get around? Because obviously I was actually a bit surprised the other day I got online just to see how much it cost to fly to Melbourne. Not that we'll be flying to Melbourne because it has, we record this, I think that they're potentially facing the lockdown. But I was actually quite surprised that they weren't really expensive. I was expecting that you know, flights would be so much more expensive, but I guess they're trying to entice people to fly again. But you know, we do have a bit of a, we've got around it with, it does go around the country, however, it's, doesn't go to a lot of places does it, and it's not that fast. And they're all there re we're relying on our cars. I mean, do you see, or is there, do you have any faith that there's going to be a more effective role network in this country?

Mark McCrindle: There's been a lot of work done in recent years on fast rail and high speed rail nationally. And there's been some government funding towards some pretty significant research projects in that space. Now it's in feasibility stage. We haven't actually seen any, any fast projects stop, but, but that is something that's being seriously considered. I know that you know, we've had this long fascination in Australia with fast rail and, and every 10 years that comes up again, but the facts are, are, are undeniable. That is that the Sydney to Melbourne corridor is the second or third busiest air corridor in the world. You've got two cities of more than 5 million people. And if we did have some fast rail as an alternative to flight, that would really open things up and importantly, not just provide a connection between these two hubs, but open up the three incredible regional areas in between our two cities and from there, maybe the Canberra and, and of course, Southeast Queensland joining the loop. And I think we, we have such viability for high speed rail in Australia. We've just got to have the vision to make it happen

Veronica Morgan: Because once of course, once we do that, it does take away that heavy reliance on Sydney and Melbourne in particular. So, you know, we could see that facilitating a real change in, in, in the way or where people live. Right,

Mark McCrindle: Exactly. Right. And that's the goal of high speed rail is not that it just provides another corridor, another way to get from one city to another, but unlike flight, you've got these stops along the way. And so suddenly if you've got an area like, you know an Albrey where donga, you know, in between the two cities which turns out to be, you know, an hour now from, from Melbourne because of its connections with high speed rail, suddenly that changes things. It's, it's, it's the equivalent of an outer suburb of in terms of that time. And, and so we're, we're decoupling location and, and we're more thinking about time from one place to the other. That's what high speed rail does opens up our internal areas, empowers the regions, creates a lot of jobs and gives us that livability, that we look for, you know, a little bit of space but gives the connectivity that we do need.

Chris Bates: So I think the other benefit is you know, the needs that is employment. You know, you can, if you want to build a kind of second city or a third city, you know, a lot of people in the past thought I wouldn't move regionally. Cause if I lose my job in the city I'll then have to try to get another job in the city and that's going to be hard, or I'm going to have to get something locally and there's no jobs. And so employment prospects is one of the things that stopped people leaving the city. But I guess this sort of work from home movement or, you know, work from anywhere really, you don't have to be at home. How do you think this is going to change longterm? Has this kind of been the catalyst that's really going to really send it on a different track?

Mark McCrindle: Exactly. Rock Chris. I think that's just a fascinating insight that, you know, we're now decoupling work from location. And so we don't have to all hit into Sydney or Melbourne CBD to hold down one of those corporate jobs, or maybe people will still hit in a once or twice a week. But, you know, then suddenly if you're only commuting twice you can put up with the hour and a half of that does open up those outer rim areas of our capital cities. And it does change the equation. And if we think about some of these regional hubs that might grow, they become more appealable because of their location and also they might grow and then you get that, that, that economy of scale and they become their own employment hub, you know, in their own rights. So I think the new working from home arrangements and studying from home, I have opened up a new outlook, a new way of viewing where we live.

Chris Bates: Yeah. So in Melbourne, you know, what are the, some of the areas that you think about the Ballarat Bendigo Jalong, like, and these are the, the areas that have kind of been waiting for something like this to kind of get people to move there, the confidence

Mark McCrindle: They have in each of those cities, as you just rattle them off there, we're talking, you know, six figures now Butler and Bendigo have both passed the a hundred thousand Mark Geelong's in a quarter of a million. So pretty sizable already and just an hour from or so from Melbourne. So, you know, pretty good, but, but to do the daily commute, maybe a little bit of a hole, but suddenly I'm in a work from home environment. They become very appealing. Indeed, of course, the cost price of, of living there is a lot lower. And the appeal of the regions is greater than suddenly, you know, the, the highly densified, Melbourne living. The other thing that's come about through all this covert, just in terms of broadening out our mindset around where we live in lifestyle is the strengths of the CBD, that it was close to employment, that it was walkable communities and the cafe downstairs and community all around.

Mark McCrindle: You turned out to be a weakness when we were trying to self isolate it distant. Meanwhile, those outer areas here where you've got the backyard where you've got the front door, where you're not bumping into people all the time which was a challenge. Cause we felt a little bit out of it all turned out to be a strength. So we are going to see a boom towards the attached above just the pop. And we're going to seek people, rediscover the benefit of a backyard and a bit of spice. It might be extra rooms cause now one of them set up as a study, another set up for a work from home environment. And we were going to see people recognize that a longer distance from the CBD is not necessarily a, a negative as we rearrange our work environment.

Veronica Morgan: So you think it would have become a space versus location, a debate. This is quite often, we finally told me you're helping people buy their property, buy a home anyway, that there's always this idea of the Morehouse they get or the bigger apartment they get typically to make it affordable. They have to move further out. So will these there make those bigger places more expensive?

Mark McCrindle: Well, it'll certainly give more benefit to those places which were marked down because they were so far away because of the commute. So, so it does level it up a bit more and, and, you know, not everyone is going to be working from home. Not everyone can, and a lot of people do need that location and we will bounce back from this sentiment of, of worry about social isolation. And it might be some months, it might be a couple of years, but, but we will get back to, and I think it's important. We do get back to the walkable communities and the benefits of some densify living and the, the fact that the environmental footprint is less, that the social connection is greater. And just so we can get by without, you know, the car and walk around, we will get back to some of that. But in the medium term, it's certainly shown the benefit that some had written off of the detached home, the four bedroom place and and, and a bit of place with some green space out the back.

Veronica Morgan: So the tiny house moving movements dead in your

Mark McCrindle: Well, I'm sure all of us who worked from home and had kids at home found that even the place we did have was probably a bit squishy. You know, everyone under 40, it was a challenging few months. And if we have that to return, which we may well, you know, and certainly having people working from home one or two people might become more of the norm. We, we did appreciate the extra space and those extra rooms. We, we suddenly found a useful, not just to store junk but to actually work or study from there. And I think that is the benefit of, of a larger place. And it's not just about the detached time. I mean, it's, it's the three or four bedroom units, which are now viable options as well. More rooms are better than less. If we're going to have flexibility around using that for work or study,

Veronica Morgan: In your research. Have you sort of uncovered, I guess, pressure on the family unit? I think you know, anecdotally I've heard stories of you know, a lot of inquiries for counseling, for a divorce lawyers relationship breaks downs, because of being forced to isolate a, you know, are you seeing sort of any sort of, I guess, significant issues in that area?

Mark McCrindle: We did track that and we asked how it's been in the household. And yes, we, we found that one in fog just under one in five, said that there has been increased tensions in the household because there were, they were all there 24, seven for a while, and having to, you know, give a little as, as someone's on a zoom call and interfering with our quiet space that was there. But interestingly, and this is the research finding that more than that, and it may even be the same group, just over one in five said that it strengthened relationships within their household. We had more time together, more time, and we spent a day on screens in the work or in the study. The last thing we wanted to do in our recreation time is get in front of a TV. People were dusting off jigsaw puzzles and family game sites to come back and back out cricket.

Mark McCrindle: I was suddenly back on, we found the old soccer bowl that I think it had a positive impact. And, you know, definitely when we're forced to spend more time together. And, and, and, you know, you had, you had adult children returning back to the family unit. Those kids that were working into state came back, it was, it was a really different era. But, but, but in midst, all of that, it forced us together. And yes, there might've been some increased tensions, but that's how relationships grow. We've got to resolve it. It forced us into it and it built relationships through it. So I actually see that it, and I think it will be shown to have had a stronger impact on our social relationships than even the, the, the negative tension that it created.

Veronica Morgan: You're very optimistic fellow to think, to even suggest that it might be the same one fifth that have made it, that has made them stronger. But you know, obviously divorces a is good for, for real estate transactions. And I say good on using the word advisedly, but you know, relationships breaks down breakdowns mean that houses and apartments need to need to change hands. So that brings some energy into the market. Something, I guess you could describe it as that, but I'm interested too. You did touch on there. You said that adult children moving

Veronica Morgan: Home, and certainly that's been an impact on the rental market and the share house market. Have you got any insights to add into that? I mean, would that be, you know, is that going to be a fundamental shift in the way? Well, how long people stay with their parents for argument's sake? Do you see that as permanent or that sort of more sitting around the fact that gen Z and gen Y have been more impacted financially and and also the, I guess they didn't, they could leave their rentals?

Mark McCrindle: Well, it has been significant ended sorority now being a few months, since some people got out while they could, out of that state or out of that city came back to the family unit and, you know, borders are still shutting people. Aren't able to get back to maybe what they had prior, what we saw and we track this demographically is that during the covert time, 3 million Australians changed their housing arrangements w with either adult parents moving in, or maybe it was the adult kids coming back to the family hub maybe it was people who had a rental letting that go. And and moving back with others, a lot of those group households were abandoned as a, they didn't need to study or work in that area. So they headed back to the parental hub. And so that's a massive internal migration, 3 million people either grew the household or left the household and went back to parents or adult children, and and were largely still in that situation. And with your cashflow tight and uncertainty around employment, people are not going to rush out back to renew that lease or to get back into it. And now a lot of people are able to work remotely from where they once were. And so again, they don't need to rush back to where they were. So, so it has readjusted, it's increased the number of people per household of what we're expecting. And the ripples of that, you know, will continue to flow through the property market.

Chris Bates: And is that been decreasing like that numbers per household in the census sort of thing, has that been decreasing, you know, consistently over many years, and this is kind of then taken it in a different Direction? A little bit.

Mark McCrindle: Exactly. Chris it's been decreasing for a hundred years in the 1911 census. We had, we had three more than 3.5 people per household. We got down to 2.5 people per household in the 2011 census, and it's going up to 2.6 people. So for the first time in a century, it's actually gone up not down. And that is, that is not because there was an increase in the birth numbers. It's, it's because there's been an increase in the number of people staying at home, maybe kids staying home longer, maybe people returning home and maybe adult parents doing what they do. And in a lot of the world in the Asian world, in the Mediterranean regions, where we look after our older parents, we don't just send them off to an AME facility. And we're seeing a bit more of that, you know, a generation that are well, the younger longer, and that are, want to, or need to rush off to retirement living. And so they're living in the parental hub or in the family unit a bit later in life as well,

Chris Bates: Especially when young kids are coming along you know, free babysitting, et cetera in the house. Yeah. I think it's this really, you know, the whole work from home opening up regional hubs you know, because of the housing affordability and this ish issue in the city. And you know, that is one of the biggest concerns of gen Y without a doubt. So if they could solve that problem by leaving is this conversation really around kind of the, what will the gym wise do after this Corona? Because I think, you know, what would the gen X is kind of want to just really stay in the city? Cause they've already kind of embedded with their roots and their friends. Maybe the baby boomers don't want to leave because their kids haven't left. So is it really what the gen Y is decide after this? That will determine whether, you know, that regional hubs really grow?

Mark McCrindle: Absolutely. You know, those gen Ys are the key to the future population profile of our nation because they're moving into the family for many years, they are the ones that are open to change. They haven't, as you said, put their roots down deeply, they've delayed buying their own places and everything is an option, particularly post COVID. And many of them having reprioritized as saying, you know, do I want to be on that crazy work life that I was on that was perhaps not longterm sustainable? Or maybe if I think about a regional area, if I do the tree change, I can like cup, I can actually afford a place I can cut down on what would have been the, the intensity of the hours required. Yes, I might take a pay cut working in the regions, but you know what, I might be better off overall after housing costs and many are doing those figures and, and are making the change.

Mark McCrindle: And this was on pre COVID as well. Of course, that's why, you know, as I said, Sydney loses more people to the regions than it gains because Aussies are voting out of the cities. And these are young Aussies as well to the region geo these regions, we're not talking about cities of 20,000 people, you know the gold coast, our sixth largest city, you know, nearly 700,000 people. And we mentioned Jamal and and the like, so there's been a bit of the, the sea change that Oz's have always loved, but there's increasingly that tree changes well where they're moving to the internal cities. I mean, to have a look at at the growth of Hobart over this last five years, you know, as people get a bit of lifestyle, they still have a bit of a city field, but, but a city of 230,000, not 5.3 million, you know? And and it's a different lifestyle that you get in some of the cities outside of the East coast.

Veronica Morgan: But with Hobart, you keep hearing sort of stories that it's more that's where retirees go and all the young, the youngsters, you know, go to the main land. Are you saying that actually gen Ys are moving to Hobart and actually setting up home there rather than in a main city on the mainland

Mark McCrindle: It's slowly starting to change Hobart or Tasmania? Generally does have one of the oldest profiles of Australia as does, you know, South Australia. But it is to change. There's a vibrancy, there's a vibe, there's a an ops culture and, you know, a renewed lifestyle culture that young people are going for. And again, the affordability is such, that's where I've seen property prices rise there even about some of the other capitals in the last few years and the population, which was very static in Tazzy has been going up, but, but, you know, Tazzy and the shift from the mainland to Hobart is, is, is a bit of a shift. But you're getting a lot of the changes within one's own state. So, you know, you're getting Sydney side has moved to Newcastle or, or, you know, you're getting the Melbourne arts moved to Jalong or, or Ballarat and Bendigo. And, and it's, it's that it's that relocation move from a capital C to not just a regional town, but to another city, a large city in itself. But one, that's got a bit more lifestyle and affordability than the one they're leaving.

Veronica Morgan: And do we, do we look to other countries, say the U S as being another modern country, or maybe, you know, a lot of the European countries where they've got these sort of smaller cities in between the biggest cities and regional or what they call a provincial towns that, that are close to being employee employers, et cetera, et cetera. Do we, do we look to that as being a model for how it could work? Or is it, this is something that's a bit unique to Australia in terms of how we're going about it.

Mark McCrindle: We are starting to think that way, that that's right. I mean, you know, you look at how our population has settled and we've got two thirds of us living in our top five cities. You know, you've got, you've got a fifth of the whole nation lives in Sydney and another one in five lives in Melbourne. You're, we're very capital city concentrated, and we've almost forgot about all these other cities and you know, this massive landmass and and the options that are available. And we are starting to change that view. We're seeing some of these regional areas grow at rates faster than the capitals Jalong in percentage growth rate terms has been the fastest growing area in Australia now for a few years, Stripe growing faster than Melbourne and Sydney. So, so the second tier is, is sometimes called the second largest cities in our capitals in our you know, States outside of the capitals are those that are starting to grow fast because they still have the scale. You still get the cafe culture and the lifestyle you want. But the affordability is better. The lifestyle arguable is better. And and now with being able to work from them solving the employment situation they're going to have this extra boost as well.

Chris Bates: Was that like the, you know, I guess as a, why would you do it? Well, you know, a lifestyle affordability cheaper cost of living can still get employment, et cetera. But a lot of people still haven't had the guts, but still haven't had that, you know, they'd go for that easy option. Let's just buy the house in the inner ring or the middle ring or the outer ring rather than making that big sort change. And I guess that a lot of people think, well, is there going to be people like me there, you know, is the community is strong, but have you, you know, so it's kind of like a chicken and egg problem, right? Like as soon as people do move there, then people go actually out people like me and people have done what I want to do. Do you think that's what we just need is that it just stopped growing and they would have stopped moving there on mass and then people will stop to conduct, follow like sheep.

Mark McCrindle: Well, exactly right. And, and we're starting to see that diversity of generations in the profile of these areas, you know, have a look at what these, these cities have done. They've set up universities in all of these ones that we're mentioning. And even, even the smaller ones, like, like male juror and Wogawoga, you know, there's, there's universities there, there's, there's independent schools for parents who want that option. You've got the, the infrastructure now with whether it be NBN or wifi opportunities through, again, you know, the cafe and the hospitality culture. That doesn't mean that 7:00 PM. You can't get a meal, it's all paged. And, and young people have recognized that maybe there are some older or boomers still have the stereotypes of what regional living is like, but it has changed. And, and there's a vibrancy there that young families are recognizing. And, and they're saying, you know, maybe I would forget about this hour and a half commute from the outer rim to the city in the Capitol and exchange of a bit of lifestyle. And, and, and again, you know, Cobra accelerating some of that shift.

Veronica Morgan: I always judge a place on the availability of coffee and and the quality of that coffee, I was just out of the South coast a couple of weeks ago when we were driving back very early in the morning, Monday morning. And we came into Berry at about 6:30 AM and I thought, Oh, desperately need a coffee. And I was wondering what sort of compromises I have to make. I wish I could remember the name of this place, but we pulled up this groovy little hipster guy. He wasn't that little, actually a groovy heaps hipster dude with is the best coffee I've ever had berries a little bit Sydney Sydney down the South coast. But our, my God, it was, it was way surpassed my expectations

Chris Bates: And that's queen straight cafe or queen street restaurant or whatever, it's,

Veronica Morgan: It is on queen street, but it's not that called that. I can't remember what it's called the tiny, it's a hole in the wall basically, but it's tiny. Yeah, it's a tiny shop front, but I, it was a big, very big smile on my face I have to say. And that encouraged me to move to a country town. If I knew that I could get caught and get coffee of that quality,

Chris Bates: Good coffee machine. Now, if I had under dollars I think, you know, not being able to go out and go to cafes, I'm sure a lot of people have, you know, you know,

Veronica Morgan: It's the beans. It's not just the way it's made, it's the beans.

Mark McCrindle: Well, exactly. And it's the experience. And I think, I think that's emblematic of what we're seeing in these regions now, you know, the lifestyle and and, and this is right across the place. I mean, you know, Newcastle has reinvented itself as a, as a place to go. Willingong, you know, you get, get the good coffee coffees and the, of the lifestyle, and then Jalong has been on the journey. And and it's not an industrial city that we used to know as well. So, so we've had the resurgence of these places and the younger generations have recognized it. And and it is something of the future settlement patterns of this nation.

Veronica Morgan: Mark, you mentioned Jalong, and you did say it's the fastest growing city in Australia. What is it specifically about Jalong that has created that?

Mark McCrindle: Hmm. And keep in mind, it was only a couple of years ago that, you know, the forecast were pretty die for that city, with the shutting down exactly and unemployment. And, you know, it's had a chair of, of social problems and, and youth unemployment, but, but what a transformation and, and firstly, it's that it is a satellite city, you know, it's, it's within an hour or so of, of Melbourne. And when a city hits 5 million, like Melbourne has you know, it's obviously got a very large footprint and people say, well, actually, you know what, I'm probably living closer to Jalong than I am to Melbourne, even though I'm officially Melbourne. Maybe I'll just make that shift to, won't have to worry about the commute and houses you know, take 30% of the price at least. And, and that's, that's part of it.

Mark McCrindle: You know, people have recognized that these these regional or satellite cities also a gateway to new opportunities, you think about Joloni and suddenly the great ocean road is, is, is a little, you know, Saturday morning drive. And so, and of course with that growth with the new generations has come the vibrancy around the lifestyle, a place like Jalong as well established with now a couple of universities and the guy in the scrolling and all of the options that young families look for. So, so we've again, changed our, our perceptions. Indeed, the cities have reinvented from the industrial ones that some of these coastal cities used to be like Newcastle and Wollongong as well to these, these family-friendly livability cities. And and that's been that change has been recognized by the next generation.

Chris Bates: That'd be great. I mean, I guess this is a work from home thing. It's going to be one of those things where we don't know whether companies will, you know, bite the bullet and have to offer flexible working terms because they can't attract top talent because all their competitors offer work from home. And if consumers decide that two days or three days from home and two or three days in the city is the optimal thing that they want the workers, then the employees will have to offer it. And then you get this real shift because it's not the employers driving it, it's the employees. And it's just more not, I guess, we're not sure how employers, or kind of really set their, their rules around how their, their staff have to come to the office. And so I guess it's gonna be really interesting to track that. And what are some of the other trends that you as a social researcher that probably, you know, spends every minute thinking about these things that you're really watching after COVID that not many other people, you just think that it's quite fascinating to you in particular?

Mark McCrindle: Well, making sure that we continue to not just be good at what we do, but be agile to adjust what we do for the future. You know, I think this has showed us all that the future is not a place that we're headed. It's not an inevitable destination. It's something we're shaping it's created not inherited. And, and we do have our destiny in our hands in that sense. And so it's those companies that actually can, can adapt. And we've seen it through covert, you know, change their delivery methods, maybe even retool to create new products or services in such a time. They are the ones that actually have thrived even through the chaos that has been covered. So it's that adaptability that is so key. It's making sure when we come to employ people, we look at people who, who aren't just going to get a job done, but who are leaders in self-managed in their own rights so that they can be independent because that's the future.

Mark McCrindle: It's going to be workers who are offsite, who are working from home or, or, or diverse in terms of where they're going to work and they need to self manage. And a, and B B, if you like entrepreneurial in thought and leaders in, in mindset. So we're seeing changes to how we work to, to what organizations need to do to, to who we look at in terms of employment. And that, that agility is, is going to be key. And, and of course it's changing our attitudes to not just where we live as we discussed or where we work, but even how we shop. And and so we've seen us step to that whole thing. And I'd probably what this has made us really aware of is that while there have been trends coming thick and fast really over the last 20 years foster trends, this has highlighted a new reality of continuous volatility where we're the changes come hot on the heels of each other, they global in their, in their nature. And, and therefore we just have to continue to, to adapt to the, the environment where it's

Veronica Morgan: Earlier you talked about the, the word hopeful in the surveys that you can duct. And there's more of that now than there was at the beginning of this covert crisis. But also the fact that we were learning to deal with is continual volatility. So we're not sort of getting to a point we're not aspiring to a point where it all settled down and we just sort of go back to normal. This is the new normal, right. How is that sense of hopefulness or I guess, are we changing the way we thinking about things in order to become hopeful? I mean, where does the hopefulness come from?

Mark McCrindle: Mm, great, great point. Well, what I've seen in this, you know, those great leaders and it really was modeled for our national and state leaders who handle things so well amidst the uncertainty, there was no playbook on this, you know, no country had, had had the on, on how it was to be managed. Every country had to suddenly work out how they're going to respond. And we saw our leaders at all levels be completely open and honest with information. They were making those calls early and making them clearly communicating them and backing themselves. And you know, that, that leadership with strengthened confidence did instill a bit of confidence in all of us. And it's that same attitude. I think we, as leaders in our own rooms need, you know, so rather than react when the issue emerges, we've got to respond and respond proactively.

Mark McCrindle: And I think deliberately I think this gives us an opportunity not just to resume what we were doing, but to refocus and reprioritize and set up more deliberately into, into this new era, to if you like reimagine what might be possible rather than just rebuild what we had. Because I think you're much of what we had pre COVID. We will never see a gate and we're not moving to the next, but I think it's to the new, it's not a continuation of how things were, but the start of a whole new reality. And with that in mind, we need to understand we're now living in a new country in a sense, a country that we didn't have. That's not the February 20, 20 country anymore. And and so I think that understanding that new reality means that we've got to adapt and, and respondent, and hopefully refocus or reimagine what might be possible in this new realm.

Veronica Morgan: So it's an opportunity.

Mark McCrindle: Exactly. It sure is. Yeah.

Veronica Morgan: So do you have a Dumbo for us property Dumbo? So our lesson that we can learn from a mistake, somebody else maybe even yourself has made. Yeah.

Mark McCrindle: Well, the first is I think just to, to be so aware of these demographics and the changes and, and probably like we were saying, you know, not just think we know an area because we saw that area growing up where we went there on holidays. And so we know because areas changed so quickly, suburbs changed so quickly, you know, it's, it's our experience. We sort of go to a summer, we think, wow, this, the culture of the suburbs changed, the cultural diversity has changed. I thought it was, it was more Anglo announced this, this group or that group of starting to, to shape it in terms of its culinary and, and richness. And, and that creates new demand and new opportunities. And I think that's key for us to recognize that our suburbs are cities and therefore the property market is a dynamic one.

Mark McCrindle: And what we knew is no longer necessarily what it was. And it also reminds us of our, I guess, you know w we're going to be Dumbos if we don't follow that basic rule of diversifying because if someone, for example, was fully sold on commercial property in the CBD, and that's where all their investments were, they've got a challenging few years because even the tenants, they do have our own you're paying less now in this, in this new environment, under the, under the opportunities that exist with the government, you know, not, not letting Lisa's B, B, B be maintained at at the same lease level. So, so when we diversify across the different areas, geographically and across our commercial retail, and, and of course residential, it does help us get through the storms and, and, and deal with the different realities that these volatile times present.

Chris Bates: I love that because a lot of people will say, Oh, you know, why are you fascinated about property so much? And you know, why do you want to read about it and learn about it? And why do we even do these podcasts? Like, why do we, what drives us? And I think what you talked about there is it's all about the people side, you know, understanding how, you know, the country's kind of going to grow and what's going to change, and what are we going to? And that to me is what drives property, you know, the desirability and livability of it. So I think that's, what's fascinating, really not so much, you know, you can make this money here and all that sort of stuff. I think it's more about truly understanding what's driving the whole economy and property prices. And I think that's the thing that a lot of people sometimes miss, because you know, what a properties desirability today could dramatically shift within years, you know, if a new tower goes up or, you know, demand leaves like a mining town you just gotta be, you know, really understanding the longterm shifts with demographics and just Schumer preferences really, isn't it

Mark McCrindle: Exactly rockers property experts said to me, in my early days, two things, you need to understand if you're going to make a go of property, and that is people and numbers, you know, and there's a lot of people in property that understand numbers and they understand yields and rates and percentages, but you've got to understand people because as you said, people not just populations and demographics, that's, that's important, but individuals and the sentiment and attitudes and fears and hopes, because that also drives those decisions in the property market as well. And that's not just the residential property that retail and, and also commercial. So yeah, people in numbers are key to success in property for anyone.

Veronica Morgan: Well, that's such wise, so such wide kind of stumbling over my own words here, such wise words there, Mark, thank you for that. And, you know, I was told that when I first got into property as well, it's not about bricks and mortar. It's about people and it's so true. And that's why we wanted to talk to you today. So thank you so much for your time. So great insights into some changes that we are starting to see actually already due to affordability, you know, in terms of a migration away from cities, but also in the reassessment or a real alignment of values in this COVID world. So I appreciate your time, Mark. Thanks for coming.

Mark McCrindle: Oh, thanks. Veronica explains a lot. And thanks, Chris.

Chris Bates: Thank you so much, Mark. Really appreciate it. We've got in my queue a bit of elephant rider, this week's elephant rider training here.

Veronica Morgan: Well, if you're going to be looking, buying property in a regional area, whether you're looking at buying it for investment or whether you're looking at relocating there yourself, one thing that you really do need to be very mindful of when you're moving from an urban area from a city is to not look at the local prices with your city mentality. Now, I particularly when we were filming the show used to see this quite a lot, you know, people were moving from one city to a regional area and they'd be like, yeah, and you've probably heard it, Oh my God, that's such good value. I can't believe I can get a place with a view for that much money. If only that was in Sydney or Melbourne, I would never be able to afford it, et cetera, et cetera, that sort of thinking can often lead you to actually pay too much money for it because you're actually valuing it as, almost as if it was in Sydney, rather than as that property in the location in which it actually is. So it's a really important thing to be very, very mindful of to price the property in its local context, not in this sort of Rose colored glasses mentality, where you think, okay, if that was in Sydney, you'd be so much more. So therefore it's a bargain. So that's a big trap for people that are moving from urban expensive areas into other areas because of affordability.

Chris Bates: Yeah, I think it's so true. And then how the agents like to deal, how fast, how do you make offers? You know, do you, you know, that whole way of transacting is potentially completely different in those areas. And you know, I think it's rushing that decision. You say a lot of holiday makers, you know, when you're kind of cruising the main street, you pop look in the real estate windows and think, wow, look what I can buy for your money. And, you know, I've seen clients over the years, so many times where they've actually gone and bought a property in say marimba or something like that. Cause they're on holidays and there was no other real justification behind it. So, you know, w have they bought a great property? Probably not because they haven't really spent a lot of time researching yet. And B Yaki say that potentially overpaid, cause it looks cheap based on capital cities. So that's a really good hello. Fernardo

Veronica Morgan: Yeah. I looked at the timing is true too because Trent properties do typically transact over a longer period of time in regional areas and not always, but yes, you're absolutely right that, you know, Sydney siders, Sydney side is particularly and a, and I'm sure Melbourne is pretty similar in that they're used to having a jump quickly on a good property. And so they would actually make an offer very, very quickly and quite often, not realizing that that property might have been sitting on the market for a long time. And in that area, there's not as many buyers. And so you don't actually have to act quite so quickly. The other thing too, is that locals, you know, there's a lot of local knowledge that needs to be gained before you buy a property. And there's a bit of a pub test. You know, you can go to the local pub sometimes and just sort of chat to chat to some locals and get a sense of, you know, different areas and different problems that, or, or reasons that locals might give a wide berth to parts of the area.

Veronica Morgan: For instance, yeah. You will never know that coming from the city, you would just absolutely have no idea your buyers of property that ultimately one day you might want to sell a, nobody wants to buy.

Chris Bates: I think it's so sure on days on market, like you can figure out what properties the market doesn't want by days on market. And, you know, I've seen properties where a client was really keen on this property. It was on a really busy road near a time and sort of way, and we're really keen to move on. And I said, I've just done a quick RP data report on it and sort of been on the market 190 days or something. And they were, they were flabbergasted. Cause the agent's like, Oh, it's really hot. We've got lots of interest. And I'm like, we haven't got much interest might as be on the market for, you know, six months. So that kind of really changed their view on it. Just understanding that, and it had gone through three different agents. So a good tip for them was then just calling those other two agents and saying like, what happened? Like why, why didn't you sell it? And generally they've been burnt because they went through the whole process and didn't get paid for it. And so sometimes they'll tell you information that you need to know. Yes. Thanks for joining us. We'd love to see you again. And remember don't be a Dumbo