Sunday, May 8, 2016

Cars or trains: which will win the commuting future?



Infrastructure investment is a hot topic and the focus of that discussion tends to lean towards transport infrastructure over other categories (like energy or water for example). When it comes to transport, trains seem to feature prominently on the wish lists of big investment or ‘nation building’ projects. But how far could billions of dollars in new rail infrastructure actually go in improving congestion across our cities?  Will cars inevitably win? If so, why?

‘We need more public transport’ is the silver bullet catch cry often heard in conjunction with debates about congestion in major cities. It has become so common that its validity is rarely tested. Even large scale commuter rail projects like Brisbane’s proposed $5billion (or $8billion – what a few billion amongst friends?) cross river rail can still maintain preferred project status – despite no business case after several years of discussion and now being in the hands of the project’s third state government.

As technology reshapes the nature of work - and with it where we work - and as Australia faces cities policy with renewed national interest – led primarily by our Prime Minister – it is timely to ask how infrastructure priorities might be shaped by evolving metropolitan form and the fast changing habits of urban inhabitants. Will old ways serve new days? Do we need more passenger rail, or will cars find a new purpose in decongesting our cities and serving a new economic model?

Some recent figures through Macroplan serve to highlight the role played by rail in urban life. In 2013–14, there were 178.5 billion passenger kilometres travelled on capital city roads in Australia and 12.6 billion passenger kilometres travelled on urban rail networks. I’ve written before that this share is unlikely to change for the simple fact that only around 10% of metropolitan wide jobs are based in central business districts of our major cities. Agreed, it’s an important 10% for public transport because PT best serves a highly centralized workforce as you find in CBDs. Commuter rail in particular relies on a ‘hub and spoke’ model, mainly designed to ferry people from into and out of CBDs.

For people who work in CBDs, a high proportion will use public transport – rail included. But that’s a high proportion of the 10% minority of people in a metro wide area. Even if every single person who worked in a CBD caught PT, the mode share can never rise very high because around 90% of the workforce work in suburban areas, for which rail is not well suited. There has been a lot of talk about Transit Oriented Development (TODs) particularly around suburban rail nodes but despite decades of discussion, we are yet to see many (any?) genuine examples.

And the reality is that the economy is fast suburbanizing. New employment engines in sectors like personal services or health and caring are not beneficiaries of industry proximity. Being close to others in the same industry might have been good for finance, property and business service industries in traditional CBDs but the fastest growing sector of our economy at present is health care related, where being close to the people being served is important. This is not the CBD. There is even evidence that technology startups in the US have tended to prefer suburban or high street locations, offering high amenity, ample low cost or free parking, and cheap (or free) premises. Steve Jobs and Steve Wozniak of Apple fame started in a suburban garage after all. And Mark Zuckerberg got started at a desk in his college dorm.

As this shift of the economy moves from centralized to increasingly decentralized models – aided by new and fast evolving digital technology which makes connectivity over larger geographic areas so much easier – do the foundations of commuter rail feasibility begin to crumble?

This graph, which shows the dramatic long term decline of the CBD as the dominant employer region in Sydney, could apply equally to other capitals:

Source: The Polycentric Metropolis – Sydney’s Centres Policy in 2051, Bob Meyer, Director of Planning, COX Richardson Architects and Planners

This shift is directly related to how public transport versus private has fared over a similar long term scale, as evidenced by this chart:

Source: Mode share of motorised travel (passenger kms) 1945-2014 for five largest Australian cities, public transport vs private transport (source data: BITRE), taken from Alan Davies writing in Crikey.


Adding to this shift has been the enabling factor of falling car prices. According to COMMSEC, in 1976 the cost of a new Holden sedan (back then it was Holden or Ford and that was about it) was $4,336 and the average male full time wage was $182 a week – meaning it took 24 weeks income to pay for a new car. Today, the average full time weekly wage is around $1,440 and there are plenty of good quality brand new sedans you can buy for $19,000 on road. In just over three months, you can own one. New cars are fuel efficient, emissions efficient, reliable, technologically enabled and comfortable.

Rubbing salt into the commuter rail wound is that travel by car – even across larger distances – tends to be quicker than rail. Here’s the picture in Melbourne:

Source: Average journey to work trip duration by mode and ring, Melbourne (source data: VISTA 2012-13). Taken from Alan Davies in Crikey.

In Sydney, according to their Household Travel Survey 2013-14, only 13% of car drivers took longer than 45 minutes to get to work, while 79% of train passengers took more than 45 minutes. 

So, given that commuter rail is best designed to serve an increasing minority of the workforce with jobs in traditional CBDs, how will spending extra billions on commuter rail infrastructure expansion solve congestion? How will it translate into more rail passengers, given the way the economy is changing?

Is there an alternative?

For me it’s actually not a case of one or the other. Sensible investment in commuter rail, given the existing investment in rail networks, makes sense provided there’s a valid business case and the alternative options for that investment have been measured.

It also strikes me that we may have a forgotten the massive sunken investment in metropolitan road networks which do most of the transport work in our cities. Some (not all) of these roads are congested for maybe 4 to 6 hours out of every 24. Our cars which move us around our cities spend maybe only 3 or 4 hours a day going anywhere. For more than 20 out of 24 hours, they are parked.

Talk about driverless cars is not just about a fictional scene from ‘Total Recall’ – it’s also about computer aided traffic management on a city wide scale. Squeezing more efficiency from the road network and from motor vehicles seems to make a lot of sense. Ride sharing apps like Uber provide an early insight into how disruptive technologies can impact on traditional, cumbersome and market protected transport thinking. There are also car sharing Apps like Goget and more are on their way. Technology is changing the way we do everything, from entertainment to where we work and how we get around. Would it not make sense for cities to be exploring how this wide scale urban economic shift can best served, rather than stubbornly sticking to mantras about public transport systems designed for traditional urban employment models?

And what about buses? Their great virtue is that they can use the metrowide road networks. It is easy to change a bus route to adapt to demand. You can’t do that with rail. Think how technology might soon morph public transport buses and private transport cars into a hybrid of some sort? Driverless buses are not new. Perth is already about to trial them. This is just a baby step. Think about where this could lead.

There’s no such thing, in my view, as a bad infrastructure investment. But there’s only so much money to go around. The decisions on infrastructure investment, when it comes to issues like urban economic productivity and reducing congestion, should focus on how to get the best bang for the buck. That can mean thinking more about the future and how patterns of work will shape what we need from transit systems, and working back from that to identify the best solutions.


Tuesday, March 29, 2016

New Economy, New Jobs, Old Thinking?

The changing nature of our economy is making itself felt across the business sector, and this in turn is changing the nature of work and where it takes place. But is our urban thinking keeping pace with this change or are we too sentimentally attached to old patterns of urban development to allow the new economy to thrive?

Urbanists (or new urbanists or their various incarnations) have celebrated the role of the city throughout history. They have been ardent supporters of urban development, particularly inner urban development, and have traditionally favoured century-old models of place-making, social collaboration, work and play.

Traditional European or US urban models of urban development have been studied diligently and even modern cities that developed well into the age of the private automobile have been urged to mimic initiatives that reflect traditional forms of the urban – be that in transit, housing form or other aspects of a city. The sentimentalism was the backdrop for the enigmatic movie "The Truman Show" – itself shot on location in a ‘new urbanist’ community of Seaside, Florida.

But then along came 21C digital technology and it looks like the urban party is at risk of being spoiled. The pace of growth in technology and its ready access has been responsible for everything from a rapidly ageing population (extended lifespans thanks in part to technological advancements in medicine, early disease detection and treatment) to the globalization of work, and lately for the increasing ability for work to take place where it suits us.

How is this challenging our traditional thinking about cities and urban development? The evidence is starting to appear in official employment data. Based on some analysis recently by Macroplan, if 2006 is taken as a base year, the changes since then are worth thinking about. 

Traditionally, cities (and particularly CBDs) grew off the back of white collar employment. Business, finance and property related professions were closely linked with growth of office space demand. But since 2006, the index for this category of employment across Australia is sitting at 63.7 as of January 2016. In other words, despite growth in the wider economy, this category of employment has declined. It is entirely possible that offshoring (via technological advance) has seen some of these jobs move to lower cost locations (perhaps driving office space demand in Delhi?) and also that technology has meant that fewer people can accomplish more tasks. There has also been a decline in ICT roles (sitting down from 100 at 87.2) and even legal, social and welfare professionals are down slightly at 94.

By contrast, medical practitioners and nurses are at an impressive 225.7 on the index. Similarly, health diagnostic and therapy professionals are at 207.8 and carers and aides are at 150.9. Health-related professions have been the big drivers of jobs growth in Australia, followed closely by hospitality and retail (123) or sales and marketing/PR roles (133.8).

This doesn’t mean that all the traditional white collar office job roles are disappearing – just that without growth in the health sector, our jobs market as a whole would probably be shrinking.  What does this mean for city development?

Health industries are unlike traditional white collar office industries. They rely on being close to the people in need of their services. Many services are increasingly mobile. They are certainly decentralized. They do rely on proximity to each other, other than some evidence of medical related clustering for consumer convenience.

Office workers and CBD jobs, by contrast, have relied on proximity to each other for the creative energy that follows and the professional networks that proximity thrives on. But it is precisely this type of function that is increasingly being liberalized from the need for proximity, either because the nature of work can be performed just as well elsewhere (in suburban centres or offshore) or because some aspects of technology are rendering it redundant altogether.

If this continues to happen, our CBDs will increasingly become less about ‘central business districts’ and more about ‘central amenity districts’ which are enjoyed for their access to recreation, entertainment, or cultural virtues. But this will also mean wholesale changes to our thinking about urban development are required.

Transport systems designed on 19th or 20th century models of suburban commuters clocking in at their CBD office may have to give way to widely dispersed models of employment where the place of work and the hours of work simply cannot be serviced by traditional public transit models. We may need to look to partnering with the Ubers of the world to make more of our investment in roadways without adding to congestion. We may need to rethink our planning mindset which allocated fixed uses to particular sites – such as retail – and instead encourage greater flexibility in land uses to respond to the fast changing nature and location of work.

The pace of technological change will demand nimble, responsive urban development and flexible approaches to land use planning if we are to grow our national prosperity. Our cumbersome governance structures, arcane planning laws and sentimental attachment to traditional forms of urban development might all need to change to allow that to happen.

Monday, March 21, 2016

Does town planning over promise and under deliver?


After several decades of increasingly sophisticated strategic town planning, community angst and confusion - along with industry annoyance - continues to test new lows. Things are getting no better and many would suggest that planning is increasingly becoming a process-ridden exercise more concerned with vague platitudes and politically correct language than delivering on outcomes. Is there something that could change this trajectory?

Urban development and urban growth in this country was largely a laissez faire model for much of the period since white settlement to perhaps the early 1980s. By this time, in response to community interest and also to try better manage growth, regulatory planning was having a greater say in land use and development permits. Town planning departments at various levels of government were still in the main small(ish) sections of the bureaucracy. Governments of the day were more interested in seeing things built and delivered than debated and delayed. Town planning was more focussed on granting permits than denying them.

But as the years progressed since, regulatory town planning has taken on a much greater role as a strategic ‘command and control’ centre within governments of all political persuasions. As community concerns and NIMBYism becomes more widespread, planning  has become much more focussed on process and on managing politics. Outcomes have become increasingly expressed as a collection of motherhood statements, often cobbled together to appease various politically active constituencies. It’s now less about laying out land use and infrastructure plans in a businesslike manner. Instead, it seems more about making promises for political purposes.

Modern town planning has some wonderful achievements to its name but  is it also now in danger of over promising and under delivering? Does this explain why the community and industry are losing faith in the process? I know many senior town planners are equally as frustrated that their profession is at one end becoming more about petty rule book regulation while at the strategic end, more prone to flights of esoteric fancy that promises more than it can realistically deliver.

By way of example of an over promise, take this statement contained in the 2013 version of the Draft Metropolitan Strategy for Sydney which promised: “A home I can afford. Great transport connections. More jobs closer to where I live. Shorter commutes. The right type of home for my family. A park for the kids. Local schools, shops and hospitals. Liveable neighbourhoods.”

Wisely, future versions of that set of heroic promises were expunged from the Sydney Metro strategy. Housing affordability, congestion and housing choice have all since deteriorated in Sydney to a significant extent, with little sign of improvement on the horizon. Why did town planners preparing that draft feel obliged to promise so much in the first place? It was an over reach, which only serves to raise community expectation to unrealistic levels.

Another example of a town planning promise that got carried away with the narrative is taken from a recent planning document that deals with an inner city neighbourhood of another one of our larger cities.  The ‘Vision Statement’ for the local Structure Plan promises to: “Provide for (the area) to become a higher density mixed use community that exemplifies inner city sustainability, social inclusiveness, sub tropical design excellence and innovation in its urban form. It will be attractive, affordable, public transport oriented, convenient and comfortable for pedestrians and cyclists, provide public spaces for local amenity and recreation and accommodate a diverse range of people. It will also take full advantage of its strategic location and maintain its role as an employment node.”

Wow. That pretty much covers everything. Perhaps the authors could have added: “Under this plan, no child will live in poverty” just for good measure?

This isn’t trying to single out either example because they are no longer exceptions but fairly typical of the sort of tone that seems expected from strategic planning documents. If these politically motivated sentinments aren’t included, political leaders are faced with potential community outrage from the semi professional objector lobbies. The problem is that measuring the performance of motherhood statements is impossible, and plans are frequently re-made (often in line with political cycles) before any performance assessment is carried out.

And this is the point: how often can you recall reading or seeing or hearing of any strategic planning document, strategy or paper being subject to any sort of rigid performance assessment? For example, “this plan promised to deliver “x” volume of new dwellings with y% of them at a multiple of four times average incomes for the area but it achieved only “z” number of dwellings and none of them were available for less than 6 times avarege incomes.” Or what about infrastructure targets? Plans that propose to collect infrastructure levies as a result of development activity in line with that plan, could also identify what infrastructure will be provided, at what cost, where and by when. Performance assessments could identify successes and failures on defined KPIs, and suggest explanations for the failures – with remedies in turn reflected in future planning schemes. A process of constant improvement based on performance assessment. Much like a business plan does.

This lack of agreed, measureable outcomes or KPIs in much of what passes for strategic planning today also means that performance assessment is limited to ambigous or fluffy language. How often do we now read things like “this has become a vibrant community featuring sustainable design principles and a cosmopolitan lifestyle which enhances livabliity, connectivity and inclusiveness.” Just what does that really mean? And how on earth could you measure it?

Perhaps our approach to town planning – and to being realistic with community and industry expectation – might benefit if we began to include measureable KPIs and objective outcomes as part of our planning schemes, along with the community consultation that goes with them? By creating a clear picture of the outcomes we intend, and the ability to measure progress toward those outcomes, is it possible that some of the “over-promise and under-deliver”  that seems to feature in strategic planning could be addressed? By treating strategic town planning as a business plan for a region or community, could we shift the focus from ‘vision statements’ as an end game to the nuts and bolts performance objectives that feature in good business planning models as the measureable outcomes of the vision?


It at least could be an idea worth exploring. If not, we must think the current trajectory is fine and that more of the same can only make things better. Who seriously believes that?

Tuesday, March 1, 2016

We are working less while living longer


The ageing of our society raises a host of difficult issues, most of which are studiously avoided by our current crop of populist political leaders. So while they’re building up the courage to confront some ugly economic realities of the ageing of our society, I’d like to add another consideration. It’s a set of numbers that aren’t often discussed but which add another dimension to the problems of ageing.

First, a quick recap on the ageing numbers. Australians aged 65 and over are the fastest growing age group in the country. There will, in the next 20 years, be another 2.8 million of them. Part of the reason is that we’re living longer, as life expectancy grows. Living longer is something we all wish for, but we’re yet to seriously work out how we can afford it.

Here’s the sobering picture which we all need to understand. Keep this in mind the next time some new medical advancement is announced which means we’ll likely all live a little longer still.

Take someone (the following numbers are based on males) who was born at the turn of the last century, around 1900. Their life expectancy was on average only 51 years of age. They went to school but mainly left school by the time they were 14, or even sooner. Then it was straight to work. With an average life expectancy of 51 years, most pretty much died on the job after working for 37 years. ‘Retirement’ was something largely unheard of, and certainly not something funded by welfare: families looked after their elderly until death. This generation spent, on average, 73% of their life in work.

Jump ahead to someone born in 1950 – a classic ‘boomer.’ Their life expectancy by now averaged 66 years. They attended school and many left at age 14, and retired at around 60. This gave them 6 years of ‘retirement’ and 46 years of work. They spent 69% of their life at work.

Jump again to 1975 and life expectancy rose to 69 years of age. But people born in this era were more likely to stay at school until say 17, to finish high school. They retired at around 60 and had 9 years of retirement before death. This generation spent 43 years at work – less than the previous generation – or 62% of their life.

And now to the millennials. Born in 2000, they can expect to live to 76. They will be at school and probably post school studies (and staying at home) to around 22, maybe longer if you throw in a gap year. If they still retire at age 60, they will have 16 years of retirement. They will work for only 38 years or just 50% of their life.

We have gone from generations who spent much of their life working (and thus supporting themselves and paying taxes) to a coming generation who, by living longer and staying as dependents for longer, will only spend half their life at work.

What is our plan for funding a life where half of that life is outside work? Even today, we are confronting a wave of retirees with minimal superannuation balances, certainly insufficient to fund their way into commercial retirement living or aged care housing. The majority of retirees, even today, will rely on the pension to some extent.

Coming generations are working less and - thanks to idiotic levels of housing affordability - postponing entry into the housing market, if at all. They are even postponing children, with the average age at childbirth rising somewhat. This generation will have had compulsory super for most of their working lives, but those working lives will only be 50% of their time on the planet. And they may not be retiring with a home that is owned outright, but retiring instead with a mortgage. Or no home at all.

So Australia, tell me this: if we are to preserve our standards of living and quality of life, what’s our financial strategy for doing so? By working for falling proportions of our time on earth, we are going to struggle to fund our own future retirement – let alone pay sufficient taxes to maintain infrastructure and provide funds for pension support for the many who have been unable to fund their retirement. Do we simply suggest that seniors have to work longer? This is about the extent of any wisdom from Canberra in recent years. But try telling that to a 60 year old on the job market. There are only so many Bunnings jobs to go around. 

It strikes me that longer lifespans is a double edged sword. While we may collectively want to celebrate the idea of living longer on this earth, we need to have a very serious discussion about how on earth we’re going to afford it. 

Wednesday, February 24, 2016

Don't mention the war (on negative gearing).

If truth is the first casualty in war, then the current ‘debate’ on negative gearing is the policy equivalent of World War III. There are lies on both sides but as arguments and accusations are tossed liked grenades from the trenches, the underlying problems of housing market dysfunction are forgotten.

There’s nothing new or inherently wrong about negative gearing but concerns about the extent of its use for speculative property investment use have been raised by economists for more than a decade. Those concerns were heightened when in 2014/2015, the value of loans to property investors for the first time exceeded loans to owner occupiers.  Further, it was obvious both from official statistics and casual observance that investors were fighting with first home buyers for established lower to middle priced homes in the suburbs: typically the types of homes sought by young couples and families.

We were eating our young. While on the one hand governments and various industry groups mouthed concerns about housing affordability, we at the same time applauded ever increasing housing prices and the wealth creation that on paper went with it. Mid last year, then Prime Minister Tony Abbott went as far as to suggest that he hoped prices were increasing – on the very same day that the head of Treasury expressed concerns about a housing bubble in Sydney. 

Fast forward to 2106 and a new Prime Minister: Malcolm Turnbull. In February, Bill Shorten - a Labor Opposition Leader (who few give any chance of actually winning the next election anyway) – suggests that negative gearing should be pulled back to apply to new property only and that the capital gains tax concessions should be pulled back from 50% to 25%. In response, PM Turnbull suggests this might lead to a form of economic Armageddon.

Supporters of the status quo are claiming that ‘average mums and dads’ are the biggest beneficiaries of negatively geared property investment, which many indeed are and have been. But equally, there are some obvious excesses which even the most ardent supporter would struggle to hold up as models of equitable tax or housing policy or lending practices or indeed economic policy generally. 

Take the now famous example of ‘Property Investor of the Year’ from Your Investment Property Magazine of 2012. Kate Maloney and her partner, at the age of just 24, won plaudits from various judges (some of them still high profile housing market commentators) for amassing a substantial property portfolio.  (The full copy of the article announcing winners and runners up is here).

“Three years later,” she now writes, “if we were to sell our properties, we would still owe the banks about three million dollars not including arrears interest and selling costs. We are currently in the process of sorting out the debts. The outcome at this stage is uncertain.”

Or what of the story in the Australian Financial Review of the 15th of February, which was intended to paint a picture of some ‘average mums and dads’ using negative gearing, who would presumably in the future not have the same opportunity should Shorten’s proposals get up? The story, entitled “Investors to lose under Labor’s gearing plan” profiled a young couple, Simon and Rebecca Cooney, with two young children and who “are nurses who both earn more than $100,000 and bought their first unit in Darwin in 2006. They now have four properties in the Northern Territory capital, Brisbane and Katherine and owe $1.7 million on the homes worth about $1.95 million.”

That’s right – this level of indebtedness is put forward as an example of people who will ‘lose out’ should negative gearing be changed. If owing $1.7m on a $1.95m portfolio when pulling in a combined $200k with two young kids is now a good thing, then everything I learned at high school economics and accounting was wrong. Everything my parents taught me was wrong. Plus the lessons of history are also wrong. Hell, even the leadership of the country is wrong. Yikes, what a dope I’ve been!

Another frightening yarn (unlikely to be the last) in the Australian Financial Review of the 24th February told the story of a hedge fund manager and an economist who posed as a gay couple with a combined $125,000 in income who toured the western suburbs of Sydney looking for property, to see what was really happening at the coalface. Like a scene straight from the movie ‘The Big Short’:  “both men encountered many investors who were able to get revaluations on their properties to increase their equity for speculative purposes. ‘We met one who was able to do this 20 times in a year with their portfolio… They (mortgage brokers) wanted to put you into 10 to 15 apartments… (and) the only way they could do that was getting the bank to revalue the property so you could revalue properties quickly.”

Yep, it’s all good. Nothing to see here. Move along.

Sadly, what has become obvious is that we have become a nation divided. There are those exposed to the property sector who will fight against any policies which could even hint at cooling markets and lowering prices. Our ‘battlers’ from Darwin would be just another round of casualties - like Ms Maloney - should that happen. But at the same time, we have a pressing problem with affordability and know that the very high prices of housing in major centres is leading young couples and families – including our own children - to defer entering the market, or to be entirely precluded from it. Their housing choices are being forcibly compromised by social engineers who have deemed it only fair that in the future, we raise families in (mainly small) inner city apartments and abandon private transport in favour of public (or cycling). Evidently, detached homes in the suburbs are now for high income earners or investors, actively accumulating ever bigger portfolios.

Meanwhile, the entire supply side of this discussion has (again) been pushed to one side. We have artificially inflated land prices by creating contrived growth boundaries around urban centres, intensifying competition for development sites to dizzying levels which flow directly to the consumer. Then we choke that limited supply with byzantine planning controls that even senior lawyers struggle to interpret, leading to high compliance and delay costs. For good measure we then tax that limited supply with excessive “user pays” levies for infrastructure that doesn’t yet exist, while buyers of established homes in pampered inner city areas are surrounded by quality infrastructure they pay comparatively little for.

Our housing markets, the policies that guide them and the way in which new supply is controlled, have been allowed for successive years to get progressively worse, with little intervention other than to add complexity. We stand idly by and ‘tutt tutt’ the mounting generational affordability problem, all the while clipping the ticket as our existing portfolios rise in value.

It’s as if the Property Council’s latest campaign to defeat even the mention of changes to negative gearing – posed as it was by an opposition leader that few give a chance of winning – was spot on by picturing our housing markets as one big collective house of cards. Touch or tinker with any part of it, and the entire house of cards might come crashing down. Even raising this as a proposal from opposition benches is apparently perceived an act of war.

I’m not sure whether that was the intention or not but it’s a scary thought to think that our markets might now be so distorted and vulnerable that even a discussion about changes to one aspect of housing policy is something to be attacked with hostile intensity. 

Better it seems to instead cry havoc, and let loose the dogs of war.


Thursday, January 28, 2016

Some themes for 2016?

What will we be reading about this year? What mega trends will dominate discussion? What markets are going to shine, and which ones will wane? Everyone has their own ideas on a topic like this, and below are some of my suggestions. Hope you all have a good 2016.

Suburbia.

I’m declaring 2016 the Year of Suburbia! Why? Because I think the penny will start to drop that the CBDs and inner cities are not the be all and end all of what it means to be ‘urban.’ The suburban and even peri-urban economies of some large urban areas have been growing stronger than their inner cities, and the ‘burbs’ are also where most of us continue to choose to live and raise families. I know this runs counter to trendy policy debate which would have us believe that everyone wants to live as close to the CBD as they can, because (supposedly) this is where all the jobs are. But the facts say otherwise (though few bother with the facts these days). Later this year, the MIT Center for Advanced Urbanism is running a conference on the theme ‘The Future of Suburbia’ and they have launched a multi-year project ‘Infinite Suburbia’ which will examine aspects of suburban improvement. I’ll be relaying as much of that thought leadership work, plus ideas from other sources, as I can. Watch this space. 

Apartments. 

There is going to be oversupply in some key markets and it but will increasingly emerge that the flood of one and two bedroom stock is not what was wanted by residents, but rather what was saleable to investors (and their advisors). Rising vacancies and falling values are going to be inevitable as supply and demand rebalance over time. The boosters who claimed that ‘Australians have abandoned the dream’ of a detached suburban home in favour of an inner city micro apartment will no doubt contort themselves with retrospective explanations for settlement failures and rising vacancies – neither of which would happen if the product was supposedly so much in demand in the first place. This at least will prove entertaining. 

Housing prices. 

The Sydney market is going to cool. It has to: sustaining the sort of irrational exuberance we’ve seen in recent years over the long term just doesn’t happen without a hangover to follow. Demographia’s annual survey of world housing markets puts Sydney at the global pointy end of plain nasty when it comes to affordability, at 12.2 times incomes. Only Hong Kong is worse. Pundits who are predicting that as Sydney cools, property appetites will shift to markets that haven’t tested the limits of sanity – like Brisbane – may be disappointed. Queensland’s economy is drifting along in the doldrums, ranked by Commsec as only marginally better than South Australia or Tasmania. Oh, the shame. Without a strong economy, the property sun will struggle to shine brightly, with some regional exceptions. As always, the media obsession with housing will mean we’ll continue to read a lot on this subject. Much of it rubbish. 

India. 

India and talk about India I am guessing will increase this year as markets look for ‘the next big thing.’ And India seems to have it: their population will soon overtake China’s, and their economic growth is forecast by the IMF to reach 7.3 per in 2015-16 and 7.5 per cent in 2016-17, which is more than China’s. Their GDP per capita has a long way to go – it is currently only around US$1,500. China by comparison is around $7,000 and Australia around $50,000.  So maybe the only way is up? They have a western democratic system (much of it, like ours, dysfunctional) and a Prime Minister in Narendra Modi who by all accounts is a good leader and keen to see the economy grow. Which should mean they will need the things Australia is good at – low value add resources which are just waiting to be dug up and sold to someone who knows how to add value. Expect to read more of what India means to Australia in coming years. 

China. 

We’ve become obsessed with China and that’s unlikely to change much. Reports of ‘China’s slowing economy’ are misleading but that never stopped our media, or dimwit analysts in search of a headline.  China’s economic rate of growth has slowed to a reported 6.9%. But this is still growth. It is not a slowing. It may be the slowest rate of growth in 25 years but it is still growth. The global growth forecast, by way of comparison, is just 3.4%. The USA – the world’s largest economy – is forecast to grow at 2.7% and Australia by only around 2%. China’s growth forecast for the year ahead is 6.3%. I’m sure if Australia was growing by even 5% we’d be very happy little Vegemites with roses on our cheeks, but it seems we are paralysed by talk of China’s rate of growth slowing to over 6%. That’s like telling someone doing 100 kph they’re going too slow when you’re only doing 50kph yourself. Logical? No.

Oil. 

It recently fell to below $30 a barrel and is now climbing to the mid $30s but that’s a long way down from over $100 less than 12 months ago. So whatever happened to all that ‘peak oil’ talk and where are those forecasters now? It’s hard to see things staying this way, despite what the hopeful and the faithful believe might happen with renewables. Oil is used in everything, from fertilizer, to plastics, to energy. Plus it’s an unbeatably efficient form of energy and the world seems to have plenty of it, and the ability to find more once the price gets to around $60 a barrel. I’m no expert on commodities but the price of something so essential to our economy is going to have to figure prominently in the news media as the year unfolds, surely?

Ageing.

Demography is destiny. In Australia, we are still to confront the realities of how our ageing population is going to impact on us all. More retirees – the majority on limited incomes or who are pension reliant – being supported by relatively fewer taxpayers, is not a good formula but it’s what we are faced with. Plenty of businesses will find opportunity servicing the upper income end of the retiree and aged care cohort but few are talking solutions for the majority on lower incomes for whom commercial solutions are simply unaffordable. There will have to be significant changes to retirement policy and tax treatment of the family home for pensioners will probably become part of that. Expect this debate to become increasingly prominent as taxpayers resist tax increases to pay for pensioners and pensioners vehemently resist any dilution of their benefits. 

Immigration and population. 

Angela Merkel looked at Germany’s shrinking workforce and population predictions and opened the door to arrivals on an unprecedented scale. Was she hoping to plug a workforce gap? Will Australia likewise look to importing a solution to its need for more working age taxpayers (and maybe in the hope that some rapid fire population growth will stimulate the economy) by increasing immigration intake? The ‘big Australia’ debate never really went away and perhaps it will make itself felt again this year. Given our strong views both ways, and the racial nerve that often flares, this is a topic that will at least bubble away, occasionally surfacing in a blaze of heated opinion. 


Tuesday, November 24, 2015

2016 is Census Year. But why do we bother?

Every five years Australia holds a census of its people and housing and next year it’s our turn again. The five yearly interval was introduced back in 1961 and it has over time become the essential reference point for demographers, economists, researchers, planners, governments and industry.  The last one in 2011 cost $440 million. It’s a small price to pay for such a high quality image of the reality of Australian society. So why are so many keen to ignore it?

Evidence geeks (myself included) love Census data because it’s almost impossible to refute. Myths and theories can whirl around in a drunken dance together with ideology and blind faith, but there’s nothing like a Census to bring them crashing to the floor with a sobering thud. It’s the indisputable authority on our people, housing and habits that make us Australian. On the evening of the 9th August 2016, wherever you are in Australia, as one of 24 million Australians and some 10 million dwellings, you will be counted and your demographic, economic, social, religious, education and transport profiles (to name just a few) will be taken.

And according to the Australian Bureau of Statistics “The 2016 Census will be Australia’s first Census where more than two thirds of Australia’s population (more than 15 million people) are expected to complete the Census online in August 2016. New delivery and collection procedures will make it easier to complete the Census online.” Which is going to be way more fun than an hour of Fruit Ninja, Subway Surfer or killing time on Snapchat.

Some more Census basics from the ABS Website: 

“In 2016, the ABS will:

  • Mail 13.5 million letters to households and establishments across Australia
  • Count all of Australia’s 10 million dwellings and 24 million people
  • Employ around 39,000 temporary field staff across a variety of roles, including up to 500 people to process the data
  • Scan paper forms as they arrive using industrial scanners operating 12 hours per day, 5 days per week, over 10 weeks, scanning close to 88 million pages
  • Produce and publish over 3 trillion cells of data as a result of the information collected in the Census.”

The level of detail provided by the census findings allows almost microscopic analysis of populated areas – down to groups of around 400 people (called a Statistical Area 1, or SA1). Combined with powerful GIS data mapping, the results can be displayed in a graphical way that is both intuitive and highly informative. 

But despite the best quality of data and the most advanced tools for interpreting and communicating that data, you can almost guarantee that sections of industry, media, think tanks and various lobby groups will either turn blind eyes to the findings, or find ways to contort the findings to suit their various agendas. 

Frustratingly, urban myths will persist despite the abundance of fresh, resolute data provided by the Census. Which makes you wonder why we bother with the expense and effort of gathering hard evidence only to find ourselves confounded by public policy which owes more to perception and prejudice. 

What are some of the myths that might prevail despite evidence to the contrary? Here are some nominations but we’ll have to wait until 2017 to see for sure:


  • The myth that all the jobs growth, and all the jobs, are in the inner city. The past several Census’ have stubbornly revealed that CBD and inner city shares of metro wide jobs are stuck at around 10% to 15% of the total, depending on the city. City centre jobs are growing, but so are suburban ones – and generally at least as fast if not faster. Some will ignore the relative balance between city centre and suburban market, and by only focussing on changes in the smaller city centre market, make distorted claims that appeal to kindred booster interests. Those claims get repeated without query, and the myths get a new lease of life.
  • The myth that millennials and Gen Y overwhelmingly favour apartment living in the inner city. There has been a very significant increase in the supply of new housing in the form of inner city apartments in the inter census period and there will be even more completed by August 9, 2016. The Census will reveal how much of that stock is occupied and by what types of households, and will prove an interesting reference point in the debate about the type of housing we are building, and for whom. 
  • The myth that families have turned away from the traditional suburban home. There have been numerous reports in recent years suggesting that young families have abandoned the ‘dream’ of a detached home with a backyard for the kids. I doubt this is true and suspect the Census might reveal how untrue this is. Sure, if you’re a young single or young couple with few ties and big city careers, the downtown loft is a lifestyle solution. But once children come along, or certainly by the stage they are ready for pre-school, my suspicion is that Census data will show young families still overwhelmingly choose the detached housing form in a suburban location. This is not to suggest there won’t be an increase in families being raised in apartment style living but I can’t see the scale of social change being predicted by some commentators being borne out by the evidence.
  • The myth that the traditional family model is dying. I know it’s de rigueur to talk about the growth of single person households, gay and lesbian couples (“not that there’s anything wrong with that”) increasing divorce rates and so on, but the Census is a reality check on what can become a runaway debate.  Unless I’m terribly mistaken, the idea of mating and producing children hasn’t suddenly gone out of fashion for the overwhelming majority of Australians. Much to the frustration of some social campaigners, I suspect the Census will reveal a stubbornly conservative majority still prevails. 
  • The myth that retirees are generally all wealthy boomers with money to burn. I know it’s an appealing thought, but I suspect the income data sets for seniors and retirees will paint a sobering picture of household incomes for this cohort. Assets are another thing of course and the Census doesn’t ask about assets like the value of the family home. But still, it’s cash flow that pays the grocery and other bills and most seniors, I suspect, will be shown to be on lower incomes than we’d like to think.

Why bother with the Census? Some will ignore it and others will twist its findings into all manner of statistical contortions to prove a theory they’ve decided to believe in, no matter what. But that doesn’t detract from the fact that it’s a terrific investment in the truth of what makes us tick. Bring on August 2016!

Thursday, November 5, 2015

Contagion

Some parts of the real estate market are experiencing a new feeling they haven’t known for some time: fear. Initial outbreaks, based on media reports, seem confined to overheated parts of the Sydney and Melbourne housing markets. The question is whether the fear will be contained or will it spread more widely?

It’s always hard to pick the point at which market confidence turns. Australia started the year with unrestrained exuberance. Auction clearances were at record highs and off plan sales to speculative investors seemed like an ocean of inexhaustible opportunity, particularly with rising interest from foreign (mainly Chinese) buyers. Repeated warnings about the extent of investor activity, particularly in new apartment sales, or warnings about record low affordability relative to incomes, were brushed off.  Then along came APRA’s rule changes, and banks also shifted their risk appetites down a notch or two, reducing their LVRs and raising interest rates for investment property.

Sometime in the second half of the calendar year, rising notes of caution crept into mainstream media commentary on housing. By October, the likes of Macquarie Bank, Credit Suisse and Bank of America Merrill Lynch were warning of ‘hard landings’. (See here for an example of the bearish comments). Add to this some ‘tutt tutting’ from the celebrity TV financial commentators and the mood seems to have quickly turned from unbridled optimism to caution. 

That itself is a good thing. Opportunity and risk should be weighed carefully, not approached recklessly. The question now is how much more bad news can the market expect, will the bad news be confined to certain parts of the market, and will the market have the maturity to respond rationally?

That there is still bad news to come seems inevitable. I heard last week that traditional financiers expect that 20% of investors buying off plan apartments will be unable to settle on completion, based on the revised lending criteria. If that’s true, a lot of developers will be caught and a lot of investors will be in a bind. This is likely to be confined, however, to just some parts of the capital city markets – especially the flood of new stock of one bedroom apartments, not designed for living in but for investor price points. I can’t see projects aimed at owner occupiers suffering settlement risk: intending occupiers tend to be more discerning, and have more equity. Many investors are however highly geared and have less emotional attachment to their investment as it was never intended to be their home.

Then there are markets which were supported by exceptional but temporary economic conditions. The mining town real estate booms were never sustainable and there are plenty of investors ruing that lesson already. But even large cities like Perth, where the sagging resources economy is reverberating through employment markets just as more stock arrives, are already feeling the pinch. Even the ever ebullient Real Estate Institute has adopted a more somber tone.

Parts of Melbourne, Brisbane and Sydney do appear at risk of oversupply of a particular type of housing product (particularly very small one or two bedroom apartments). Commentators and analysts will learn that all housing units in commencement or approval data are not alike: some will find a market, others will not. If, as seems likely, there is a surplus of small apartments in concentrated locations, prices and rents must inevitably fall. Some people are going to lose money, and our media loves nothing more than hard luck stories. Expect a lot of these from the nightly ‘current affairs’ shows and tabloid press.

More stable parts of the housing market in these cities – in my view new housing and land, well located medium density projects, quality owner occupied apartment projects and the established housing market generally – ought to be treated separately, because they are working on entirely different dynamics. But will they be?

I know of two banks who are actively gaming this scenario already. They’re asking whether a fall in confidence, led by what’s looking like happening in the investment apartment sector, will spread to other parts of the markets, both by type and location? For example, if inner city apartments in Melbourne become the focus of negative market comment, will that rattle markets in established parts of Brisbane? And will it spread to other types of property?

The answer is that no one really knows - and won't until after it happens. Confidence is a fragile thing. It can go from reckless to reclusive in a very short space of time. Fanned by a tabloid appetite for click bait (bad news gets more clicks on line) and a widespread disregard for accurate or detailed reporting, it’s unlikely that there will be much rational analysis or reporting of real estate or housing markets in the coming year.

Having said that, we should be used to it. There hasn’t been much rational reporting for a long time. Real estate markets have been lumped together as if they’re a homogeneous product, and price movements have been reported on a weekly basis to feed a ravenous media and public appetite for poor quality information. That commentary will likely turn from positive to negative but its quality will remain the same: underwhelming.

On the positive side, most of us know that markets move in cycles and they’re rarely as bad as the media might make out, nor are they as risk free as painted to be in good times. Stability never rates much comment but the reality is that the majority of Australians who have owned or are paying off their home will continue to do through the cycles, both up and down. And if you do need to trade, you tend to buy and sell on the same market. If you are buying for the first time, things might improve.


However the potential of contagion plays out, seasoned players will endure it with cool heads and a rational strategy. Amateurs had neither going into this market and are unlikely to have either of those qualities if they need to head for the exits. 

Sunday, November 1, 2015

Public transport’s biggest problem… the public (that’s us).

When’s the last time you heard some futurist or management guru suggest that in the future more of us will be working at the same desk doing routine tasks on a predictable working week schedule? No? That’s just one of many problems that advocates of limitless spending on public transport need to keep in mind in dealing with the issue of urban congestion.

Increasing urban congestion is said to cost the economy dearly and if Infrastructure Australia is to be believed, it will cost even more in the future unless something is done now. They warn the current estimate of a $13.7 billion annual cost will balloon to $53 billion by 2031.

Congestion is without dispute a handbrake on economic productivity but the range of solutions for reducing congestion range from the outright zany (see Elizabeth Farrelly’s suggestions for Prime Minister Turnbull as one example) to milder versions of zany. They all tend to be very expensive and many impose unacceptable compromises on our basic freedoms (such as proposals to ban cars from cities).

Increased investment in public transport is a feature of many proposed solutions for alleviating congestion. It is true that we have under-invested in public transport systems in past decades and it’s equally true that we’ve under-invested in private transport. Basically, we’ve cheered a rising population while passing the buck for funding and delivering the infrastructure needed to support that growth to future generations. Rising congestion levels are making it feel like crunch time now.

But there are valid questions about the capacity of public transport to alleviate congestion which are rarely getting asked. Rather than a magical silver bullet, there are a few things to keep in mind before you climb aboard the merry bandwagon of limitless investment in public transport…

The nature of work is changing. Public transport systems work best on a hub and spoke model of employment and commuting, built on predictable schedules designed around predictable commuter needs. Central business districts of very high employment concentrations, where people work in the same workplace from day to day and for the same hours each day, are ideal candidates for public transport.  But increasingly this is looking like a 20th century model of work. Technology has been the primary driver of change, allowing more workplace flexibility and providing for increased location diversity. ‘Standard hours’ of work are being diluted and at the same time companies increasingly realise the high costs of ‘paper factories’ for administrative staff in costly CBD locations makes little sense. With this, the centralised nature of work is also being diluted and this is working against the centralised economic model that makes fixed public transport systems (especially rail) effective.

Society is changing. There was a time when commuting trips to work in central locations were mainly a case of getting there and getting home.  Much has changed. A rising proportion of women in the workforce and how this has changed family responsibilities means that commutes to and from work are also often tied in with other objectives: dropping off or picking up school kids or children in child care is only a part of this (but one which is said to contribute to 20% of private vehicle traffic on the roads in peak periods during school terms).  Add in to this the increasing propensity to shop less but more frequently (who owns a chest freezer anymore?) and to mix in pre and post work social or recreational appointments, and you have a very different pattern of commuting which public transport will struggle to service.

The suburban economy. A telling reality for proponents of increased public transport investment is that employment remains – and in some cases is increasingly – suburban by nature. Between 8 and 9 out of 10 of all jobs in metropolitan regions are suburban by location, and when you consider that the same proportion of residents in any metropolitan location are also suburban by residence, the problem of servicing this reality through public transport is apparent. In the last inter censal period, the proportion of metropolitan wide jobs located in the CBD actually fell in Brisbane (to 12.5%), while in Melbourne it remain unchanged (at 10%) and Sydney recorded a small rise (to 13.5%). The raw numbers of jobs in suburban locations are growing faster, as a rule, than those in CBDs.  The cost of creating a public transport system designed around suburban home to suburban workplace commutes is beyond calculation. In Australia, we will be in flying cars like the Jetsons long before this happens.

The new and emerging economy. The way cities were designed – with concentrations of white collar workers in CBDs and with discrete areas set aside for industrial, retail or other specified activities – is no longer as important for new or emerging economies. Technology in particular means that physical place is less essential for connectivity to markets. Communication is less dependent on physical proximity. This doesn't mean CBDs will lose their higher order function but it does mean that disruptive or emerging businesses, for which new technologies are more than just a novelty but a foundation, will have less need for the types of places offered by centralised business districts. They can locate in lower cost areas of the metropolitan area, and make use of the central business districts on occasion, rather than routine. Attracting and retaining these emerging types of businesses will also put the onus on suburban business centres to lift their game, but in many cases this isn’t difficult. Just think of any number of start ups or tech based companies you’ve read of recently and think about how many of these have been in non-traditional locations. Even when these businesses mature, their lack of interest in a CBD style presence doesn’t seem to change. Witness the many technologically innovative businesses in the USA or Europe, by way of example.

Where does this leave us with solutions for congestion? Ironically, increasing public transport investment designed to ferry people into and out of central business areas is unlikely to make much difference to metropolitan wide congestion. It can’t – simply because only a minority of jobs (between 10% and 15% in the case of Australia’s major cities) are in these locations. People with jobs in these locations may currently have relatively high rates of public transport usage already (often 40% plus) but imagine the cost of increasing this to 80%? The cost of getting there is incalculable for cities of our size, and in any way, it would only benefit 10% to 15% of the urban workforce. Ironically, the people most likely to benefit from this type of public transport prescription tend be much higher wage earners, living close to the inner city in highly valued real estate. (Have a look at this analysis from The Pulse a couple of years ago). Yet their higher capacity to pay is not reflected in most policy debate.

The reality is that public transport can only go so far in alleviating congestion. Social and economic change to the nature of work is changing the shape of employment decisions and has forever changed the nature of the commute. Public policy officials, urbanists and politicians who pretend that all that’s needed to ‘solve congestion’ is massively increased investment in heavy rail, light rail or dedicated busway networks are deluded: this thinking is rooted in nostalgic notions of work, unrelated to the future of work.

And as if to demonstrate the fact we should not expect better from our various governments, when a technological innovation comes along that promises to realize the long held dream of ride sharing and increased persons per vehicle - which if widely embraced would go a long way to solving congestion at no cost to taxpayers -  governments stand in the way. It’s called Uber. Go figure.



Tuesday, October 13, 2015

Old, poor and lonely: the other side of the ageing story

Much is being made of opportunities for retirement living and aged care due to our ageing population. For those who retire with a healthy balance sheet there are increasing choices within a fast evolving ‘for profit’ industry. But the reality for a majority will be ongoing dependence on the aged pension and insufficient government or non-profit places to accommodate them.

The basics of our ageing population are easy enough to understand. First, there will be more of them – with Australians aged 65 plus the fastest growing cohort in coming years, rising from 14% of the population now to around one in five Australians by 2033. In terms of actual numbers, the current estimate of around 3.5 million Australians aged 65 plus will rise to around 6.3 million in the next 20 years – an increase of around 2.8 million people. I will be one of them.

For the aged care and retirement living industry, this is a future demand profile virtually immune from market cycles. You can’t stop people aging, and as we live longer, there will be more people ageing than ever before. Life expectancy in 1970 was 70 years of age. It’s now 82, and still climbing. If you are currently aged 65, you can (on average) expect to live another 19 years for males, and 22 years for females, because ironically the longer you live the greater your life expectancy becomes.

In response, sections of the retirement living and aged care industry are transforming rapidly. What was once a cottage industry run mostly by charitable, religious or non-profit groups, is rapidly evolving into a very professional industry run by private or publicly listed businesses, looking for greenfield expansion, acquisition or redevelopment opportunities to grow portfolios and improve operational efficiencies. Many of these businesses are well positioned for ongoing growth in scale and profits and will be cheered on as market darlings by investors and an increasing number of people reliant on their growth for work. Including me, hopefully.

At the same time it is easy to lose sight of a more sobering market reality. Expansion in the aged care and retirement living industry is being led by businesses who are catering in the main for the upscale end of the market. In other words, old people with money. A significant proportion (and perhaps a majority) of old people won’t have the funds needed to enter private retirement living or aged care, or if they do, their funds might be depleted because they live longer than they budgeted for. Don’t get squeamish on me at this point, because ageing is all about economics and budgets.

So here are some financial angles on the ageing demographic which reveal a worrying future policy landscape for those not at the premium end of the retiree market.

Today, roughly one in four people aged 65 and over are either renting their own home, or still paying off a mortgage. The proportion who own their own home outright is falling, and based on falling rates of home ownership amongst Australia’s current generation of 30 somethings, the proportion who own their own home by say 2050 will be significantly less.

Then there is superannuation. The average current super balance of someone aged 60 plus and not yet retired is just $95,000. The proportion of people aged 65 and over who have no superannuation at all is around 65%. Yes, this is changing as more superannuants retire, but superannuation balances are not what you’d think. The average superannuation balance of someone aged between 70 and 74 – the average age of entry to a retirement village – is just $102,000 but this plummets to just $38,000 for the 75 to 79 age group. Or put another way, the number of Australians aged 50 and over with a super balance of more than $500,000 is just 5%.

The biggest asset most current or future retirees will have is their own home, but remember that one in four are either renting or still paying off a mortgage. There are 13.5% of Australians aged 65 plus who are renting their own home. For those who own their own home, the average value of this (in 2012) was around $500,000.

In terms of incomes, two thirds of people currently aged 65 plus have a weekly income of less than $400. This is heavily influenced by the age pension, which one in four current retirees receive at the full rate (being $430 a week). A further quarter receive a part pension, while only a third are self-funded. Remarkably some 18% of retirement age Australians are still employed, but whether this is of necessity or by choice I don’t know.

So the economic picture here is one where a significant proportion of Australian retirees, and by definition also those who will need aged care, generally have insufficient assets, savings or financial means to fund the lengthening number of years where they won’t have an income and where their costs of care and accommodation will increase.

This is a market segment no one seems to be talking about. I presume there is an assumption that government or religious/charity/not for profit groups will continue to cater for this market. But the numbers are such that many non-profit groups won’t have the financial resources to meet this growing demand as many are struggling with financing existing operations, let alone expansion. Which leaves the government, meaning the taxpayer, and the reality here is that there will be increasingly fewer taxpayers of working age relative to the number of aged dependents, meaning higher taxes. Sorry hipster generation, it’s looking pretty ordinary for you.

So what’s going to give? Will we see a return to multi-generational housing where grandparents, parents and children live under the same roof? There will no doubt be some of this, but it’s hard to see how our social mores will change to the degree needed to relieve pressure on demand. What’s really needed is an affordable housing solution for retirees and Australians in need of aged care, for whom the commercial part of the market will remain beyond reach.

Given our wholesale failure to address housing affordability problems for working age Australians and young families, it’s difficult to be positive about any meaningful solutions being found for the other end of the age spectrum. Keep that in mind when you next look at those marketing images of healthy looking silver haired retirees with perfect skin, wearing pastel coloured cashmere jumpers and big smiles (and their own teeth), holding hands as they walk on the beach… they are far from reality for the majority.