Population Ageing and Housing: Policy Implications

Population ageing is creating economic opportunities as well as significant challenges for the NSW economy and the state government. On the one hand, a growing number of seniors represent a powerful economic force in terms of their consumption spending and their housing assets. On the other, a rapidly growing proportion of the elderly in the population will put upward pressure on publicly funded age-related expenditures, particularly on health care spending. Furthermore, reduced population growth and a declining proportion of the working-age population is expected to lower employment growth and demand for housing, negatively affecting the government's main sources of tax revenues - payroll tax and property taxes. In this report, we discuss some policies to mitigate the fiscal burden due to population ageing and boosting economic growth in NSW. We focus on the role of housing and immigration. A separate section is devoted to older people, their housing assets and their importance to a healthy economy. Finally, we discuss the link between housing and health, and suggest policies to mitigate the projected expenditures on health care.