Mark McCrindle on the Demographics Behind the Housing Squeeze

In this episode, we take a step back from the headlines to look at three forces reshaping Australian society at the same time. An ageing population that's putting pressure on how and where we live. A growing divide in education choices that's influencing life outcomes.

And a generation of younger Australians who feel increasingly shut out of housing. On their own, each is a challenge. Together, they raise bigger questions about how well our systems are actually serving us. We're joined today by Mark McCrindle, a social researcher and demographer known for analysing generational change and long-term population trends.

His work tracks how Australians are living, learning and planning for the future and where expectations are drifting away from reality. It's a perspective that's going to help us connect the dots between policy decisions and the lived experience of different generations.

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 buyer's agent and buyer's agent mentor co-host of foxtel's location location location australia author of auction ready and co-host of your first home buyer guide

Hi, I'm Chris Bates, ex-financial planner and mortgage broker, currently ranked number three in the annual MPA Top 100 Mortgage Broker Awards. Before we get started, everything we talk about today is not personal advice, and we recommend you engage the services of a licensed and experienced professional.

Our guest today is Mark McRindle, social researcher and demographer who specialises in analysing generational trends, population shifts and the changing attitudes of Australians. He's a founder of McRindle Research and is widely recognised for his data-driven insights into how society is evolving and what that means for the future.

And it's been quite a few years since we last spoke with you, Mark, so welcome back. There's a lot to catch up on, I fear.

Fair bit of change at that time. Good to be with you, Veronica and Chris.

I do have to say demographics is one of my favorite topics to sort of chat because I find that I, I just find it so interesting and I feel like it's so interconnected to the property market. You know, it's around people and lives and families and decisions and

you know, it's just, it's way more deeper than, you know, when people think.

And when you think about the sort of demographics of Australia and the households, like what are some of the big sort of things that you sort of notice around sort of, particularly like the older generation that are living longer, that want to stay in their home.

You've got like the younger people with their kids' school, the mortgages, and you've got young people all upset because they can't afford to buy what they want. Like when you think about the sort of Australian demographics, what are the key sort of,

things that people maybe don't put enough value on when they're understanding just the complexity of all these different sort of demographics?

Well, it starts, Chris, with the headline figure that in the last five years, we've added more people to our population than in any five-year period in our history. So record population growth means your record demand. Most of that, three quarters of that comes through overseas migration.

So now just a quarter of our annual population growth is coming through natural increase. Right at the time we've got the biggest migration numbers, we've got the lowest birth rate ever recorded. So smaller families, delayed fertility and low increase in families through births, massive increase through migration.

But then if we look at across the states and territories, we've got this record internal migration. That is

you know australians upping and leaving may be squeezed out of the pricing in one place like say sydney moving to southeast queensland or across to perth in the last five years more people have moved location within australia than ever before as well so mobility cultural diversity aging population record demand for housing exceeding supply all of these factors really are shaped by the demographics

If I was going to double down on sort of the older generation, let's say the ones who have just retired, like let's say the mid-60s, let's just call it that, and then moving into sort of the 70s, 80s and even 90s now. And there's a little growing pool, right?

Something, you know, we've got issues with aged care, we've got issues with pension and cost of living, etc. So... Just give us a bit of an understanding of some of the complexities that they're dealing with.

Because I feel like a lot of them are causing a lot of problems in the property market in terms of they've got their home, which is rightly. There's also challenges for them downsizing and going to aged care. So why wouldn't they want to just stay in their home?

So how do you sort of understand that demographic sort of challenge?

It's a massive talking point because we've got this aging of the population. We've got more people aged over 60 than ever before. In fact, more over 60 than under 20.

So our population pyramid, which used to have more younger people at the bottom and fewer older people at the top, has become rectangular, indeed, slightly inverted.

And so our old age dependency ratio, that is the number of retirees relative to each person in the working population, paying income tax, funding the health care and aged care costs,

is is getting more um uh weighted to to the top end we've got fewer people in the working age population so it's a good news story at the heart of it in terms of it's coming about because of longevity people are living longer that and also the fact that we've got lower births is leading to this aging curve on which we find ourselves but what that means is people are not only living longer but they're younger longer they're active later they're staying independent

In their family home, as you said, Chris, for longer. They're not needing that older retirement service support or aged care supported services. And when that comes later in life, it's more aging in place. It's getting the support care packages into the home.

Now, it's not to say that these older people are just sitting on big homes forever. pricing out the younger people because they're actually supporting their children and grandchildren in significant ways.

Today's retirees are actively funding children and grandchildren and through practical means as well, letting them stay in the parental home and that sort of thing, far more than we've seen older generations in the past.

There's an interesting, like for me, I couldn't wait to get out of my parents' house because I wanted freedom. And also they lived a long way from where I want to live, but I wanted freedom.

And so society has changed in terms of what's acceptable in terms of behavior and in terms morally, there's just morals are different these days as well. And I imagine, too, that there's specific reasons why people are moving interstate.

And it's often you see the rhetoric where people are moving interstate because they're priced out of an area. But is that the only reason that people do internal migration? I'd love to sort of dig a little bit deeper as to some of these reasons for this behaviour.

Well, three key reasons for the mobility of Australians, and the first is affordability. And so, you know, you even look at a market like Melbourne, which is about 20% cheaper than Sydney. You look at Southeast Queensland, which has seen massive growth in prices, but still a lot less than the southern capitals.

And so affordability is just one, though, of the three reasons. Then you've got livability or lifestyle. So people are saying, you know, maybe I can swap out. I can still have a capital city, but I don't have to live in one of five to six million.

I can maybe live in one with one and a half or two million. And so Brisbane and Adelaide and Perth are in the running there because of the lifestyle and the livability. But then you've got the third factor of employability.

The people making these capital city shifts or the tree change or the sea change are not the retirees. They're the often couples, sometimes couples with young families or growing families. And they are looking not only for affordability, but they need the employability. And

While in the past they wouldn't have considered swapping out a capital for a regional centre or a smaller city, they're now able to do that because they can take the capital city job with them and maybe just do a bit more of that work from home.

So since the pandemic, we've seen a lot more people keep the job but move locations and that employability with the livability and the affordability is driving this internal shift.

I know you do a lot of work around the sort of education sector. And at the same time, I wouldn't mind understanding your view on this work from home, hybrid work, or, you know, complete remote work. Like, it's almost like the pendulum swung that way, now it's swung back this way.

Like, you know, and how does this education, because, you know, like...

If you're a teacher in a capital city, like good luck unless you've got another high in a high, you know, to actually get into the markets and not just teachers, doctors, you know, not doctors, maybe so much, but you know what I mean?

Nurses and the police and all the key worker housing, like how big of an issue is this is like a sleeping giant within and people say leaving and we're going to basically not have the key workers we need.

Yeah, it's huge. And we've got the biggest growing sectors being healthcare and social assistance. So just through the carer roles in aging or in healthcare, but in disability care as well, you're huge. And of course, we need people to live close to where the clients or the patients or the hospitals are.

And of course, the education sector, very big there as well. So that that

workers accommodation the essential services accommodation as well as affordable accommodation and that for first home buyers is is a key challenge that we face at the moment because not every workplace can be decoupled from location you know a lot of people need to work where

The locale is because that's the nature of the work that they're engaged in. Where it's settled, you know, in the pandemic, it was suddenly work from anywhere, work from home. That then changed to trying to get people back into the office. But it's settled into a hybrid model.

And for those who are knowledge workers who have knowledge, flexibility around where they work. The balance, indeed, the majority goal is to have some of that time gathered because work is a key social bottleneck. It is a key place of us connecting with other people.

One of the top five reasons for people to have a job is that sense of community and connection with colleagues.

Because if they're not getting it at work, chances are they're not getting it because they're probably not part of the local community organization or volunteering up the road or knowing their neighbors or connecting at the local church or worship center.

So the point is that the social mediating organizations we pass through a lot of the time for most people, is work and we need some sense of connection and engagement there, but we don't need that every day.

And if that can be one or two days a week or for some one or two days a fortnight, it gives them that social connection, that values alignment, that focus with colleagues on the job and the learning, but they can also work remote. So the hybrid working situation has become the majority.

And I think that that will serve most people well into the future.

But with the highway, you've got to get to the city, right? So you can't go too far regionally. And then if you can't, but then the people in those, even those closed regional places are expensive, right? But then they're not good enough.

The incomes they're on hasn't got enough to buy them housing affordability. Yes, they can.

can't work hybrid but then the people the schools the teachers for example can't afford to live there so because it's becoming a big big issue right like that if you and if you can't get the education there then you sort of go well i'll send my i'll go further away because i'll focus on the kids education then we lose that sort of talent in the city so is it for you also like a big problem that this hybrid work isn't still only impossible if we've got the key worker housing

Yes, well, that's right. I mean, what the hybrid work did is that it opened up those satellite cities an hour to two hours from the capitals to city money. And so Sydney side is relocating to the Illawarra down south or to Newcastle or the Hunter up north.

You know, that's not feasible for an everyday commute, but once or twice a week or a fortnight, it's possible. And so that meant that locals there relocated.

to those areas have been priced out because they're competing against someone coming with the sale value from a Sydney property and the same in Melbourne and the same indeed in Perth. So yes, it's raised those prices within two hours of the capitals and it's created or spread

the key worker housing challenge for those in those large metro areas just outside of the capital. So getting this solution is key. That's why we're seeing more densification of those regional centre areas that once were all house and land.

That's why we're seeing more focus by governments on providing key worker housing. We're seeing the build to rent model. So It's not about strata. It's not about owning. It's purely about rental accommodation. And we're just seeing the sprawl exist further.

The secondary move, you know, people move from the capitals to the regional areas and now the regional people moving to those outer regional areas facing affordability. So it's had flow and effect, but certainly it's caused disruption.

Chris was sort of asking a little bit about education earlier. Lately, it seems to be that a public versus private education question has really become really charged. And I'm out of that now. My daughter's now in uni. So all of a sudden, I'm seeing articles about this.

What is really driving parents' decisions in this space?

Well, it's huge. It's getting to the point where those students in non-government schools, if we're talking high school, is getting close to half. It's about 45% across all students in the nation.

About 40% of students are being sent not to the government school up the road where it's free education, but parents are paying something, maybe a little bit in the Catholic education sector, maybe a bit more in the

independent sector, but it's more than two in five students now in the non-government schooling sector, and it's growing. It's growing very rapidly. In fact, in some jurisdictions, in some states like New South Wales, there are fewer people in the government sector, government education now than there were five years ago.

We've got more young people, but fewer in government. It just shows the the speed of the growth of the independent sector particularly. And it's interesting because this comes at a time of cost of housing, cost of living crisis.

You'd think that people would be opting for the free option rather than spending after-tax dollars. There's no tax benefit in paying for the school fees. But there's clearly a key motivation, a key incentive. And it's our parents looking for an alignment of their worldviews and their beliefs. That's the first factor. So

one of the fastest growing sectors of faith aligned schooling, Christian schools, but increasingly there's growth in Islamic schools. And even now we've got the first Buddhist and Hindu schools emerging in Australia as well. And for those that have a different worldview, even

That might be a Steiner school or Montessori school where it's just a different worldview. So it's worldview alignment or values. Secondly, it's holistic education. So for a lot of parents, it's not just about the academic results. Of course that matters. We're talking about school, but it's the co-curricular.

It's the leadership or the sports or the Duke of Edinburgh or it's the excursions and the camps and the other opportunities, music and musicals and all of that. And then you've got another factor, which is just the –

The fact that the non-government sector has a little bit more control over student behavior and discipline around expulsions and suspensions. And so there's a sense that a parent is going to get a better behaved cohort with their child. And I guess as things in society sort of fragment and whether that be

more extreme behaviors of young people as we see on social media or maybe more extreme values or segments or worldviews, you get parents saying, well, I'm prepared to put money into something that is more aligned with the way I view the world. And so that is driving this trend.

And what we found is that that investment in the education of children is very sticky. So even though costs are rising, parents will sacrifice other things before they sacrifice those school fees because they really want to keep the stability there for their child.

It's interesting. They're asking for free public transport at the minute because petrol's gone up, but they won't take the free education. It's quite phenomenal. I also read an article recently about basically troublesome parents that the school has now the rights to shoo them off the premises.

So it's interesting that parents want to outsource that discipline to the schools. The other end of the spectrum, though, you also mentioned as we started talking about more Australians looking to age in place. And there's a number of things that have led to a shrinking of household formation size.

And I'm guessing that's one of the contributing factors. Obviously, smaller families is another. As more Australians look to age in place and as those households shrink, what are the biggest gaps in our housing and planning systems right now? Because I think... I mean, the numbers are astronomical.

With every sort of 0.1 of a percent of smaller household, that translates into hundreds of thousands of dwellings, right? So it's astronomical, the impact of this change.

Yeah, exactly. You know, not only have we fallen about a quarter of a million homes fewer than was planned under that National Housing Accord, the 1.2 million homes... We're way behind that.

But even if we achieve that based on the population growth and, as you said, the decreasing household size, we need more homes per head of population than we used to, and we're growing that population rapidly. So in all accounts, we've blown out the demand way above the supply bar.

But we are seeing some solutions to it. We're seeing the granny flat solution. We're seeing refurbs and households perhaps in those larger homes, maybe utilising backyard with a little flat or housing solution, or maybe redesigning some of the internals to allow people

multi-household living under the one roof and often that's that's the extended family we're seeing multi-generational households we're seeing parents have not only their young adult children stay at home longer but sometimes their older parents stay in that parental home as well and all of this is some of the solution to the rising costs and that allows

the pooling of funds, or indeed just the opportunities to look after the extended family within that family home. And that's part of this sandwich generation we see, the 50s and now sometimes the 60-somethings, still with adult children that they're keeping an eye on or helping or supporting or financially dependent.

And they haven't got the need for their own house because they're starting their own families later, right at the time that their own parents are elderly and needing a bit more care. So yes, that's one of the outcomes we're seeing is the multi-generational household.

But the fact is we do need more houses because the population is continuing to grow. The household size overall is shrinking and we need those 21st century solutions for the modern Australian population.

So if you look at it, number of other countries, multi-generational living is the norm, right? You look at Italy, for example, and there's family compounds, and there's a lot of European countries where that's the case, and I'm presuming elsewhere in other areas of the world.

And obviously, they've got bigger populations in smaller space. So do you think that it's because we're a bit of an immature country in many ways that, notwithstanding our First Nations people, We are. As a modern country, we are immature.

And are we just growing up because these are the pressures that happen when you get more people? Would you say that or is something different happening?

No, we are starting to adapt to some of those trends we've seen around the world. We're getting more adaption to high-density living and even young families being raised in apartments that we wouldn't have seen in the past.

It was young students, young couples, but by the time it comes to start a family, oh, now we need to go to the Greenfield area, get a house and land package. But we're seeing that change because the services that families need from the

little shopping centers through to childcare and indeed close to work is a lot more located in those urban settings. We're seeing adaption in terms of the multi-generational living that you see around the world and indeed was a historical thing in Australia as well if we go back a century.

We're seeing people look to more long-term renting, which again is mainstream in Europe. We haven't seen much of it here. Again, the build to rent option means that people can have a model where they know that they can have that housing security for a longer period of time and start a family there.

So we are seeing the Aussie dream, I guess, be reinvented in different ways compared to that house in the suburbs, detached home, nuclear family. We're seeing shifts to that mainstream option.

You mentioned the parents and the private schools before. The generation, let's say the old generation, this is my theory. You can prove me. You tell me this is absolutely not the case. But yeah, the surviving partner, right? So there's a widow and then the other one, they're living well into their 90s.

If they get to retirement, then one will live quite long. One might die earlier, but then you've got the widow, right? So then the other, and that's mom or dad or whatever. And then...

Mum and dad don't give the cash to the kids because they're worried that it's going to cause uproar, you know, and you got this and you got that. So they hold on everything. They, you know, have a family home plus their cash and they finally die.

They die at 95 and they give it to, they've got three kids. But then the kids are like, well, hang on a sec. Mum died when she was 95. I'm now 65. I'm actually all right financially. I've sort of gone through my workforce. My super balance is all right.

Do you feel like that they want to give it to their grandkids more or their kids and then their schooling and help their family with their mortgage? Because they're like, well, we didn't get the benefit of this till it was sort of too late.

So is this by giving while living rather than on death and not only just giving for mortgages, giving for private school fees, giving for cost of living pressure rather than just giving a big gift?

That's exactly right, Chris. You've summarised it well. It's the grandparents actively supporting grandchildren in practical ways while they're still alive. And it's all of that. It is the school fees oftentimes, which helps their children, but it's particularly the grandchildren that gives them that option of that school.

It's helping those grandkids get that first car. And indeed, sometimes save for a mortgage. It's sometimes letting the grandchildren stay with the grandparents while they save up and look to get their own home. And it's giving a little bit of cash support in various ways. in varied ways also.

We found that about one in five grandparents today are active with significantly helping their grandchildren in medical and financial ways. So it's much higher than we've ever seen before. And it's about $7 trillion is the net worth of the baby boomers that over the next 20 years will be transferred to

And what's remarkable is that they're not only giving it now as they can, but the baby boomers who still are traveling and upgrading, you know, homes or cars, they're not sort of slowing down.

But over the last five years, the money that they have had, even while they've been spending it and passing it on, has itself grown through money. the asset appreciation so they can't get rid of it as much as they try.

It does have implications because there's going to be the haves and the have-nots. There's going to be those that benefit from an estate and that will solve the cost of living, cost of housing challenge for them. But of course, it's not going to be equally distributed.

That gap, that egalitarian Australia where everyone could afford a home in the suburbs somewhere on a basic income is starting to fray a little. I'm on a personal mission to help more people make better property decisions.

You know, most people don't realise that they can cost themselves hundreds of thousands of dollars over the medium to long term when they make property decisions without all of the information that they need.

And what I do is help people with tricky real estate problems, which often masquerade as simple questions like, should I sell my investment property because the interest repayments are hurting? Or should I buy before I sell? Or the other way around.

You can connect with me and access all of the tools that I've created to help you make better property decisions at veronicamorgan.com.au. And there you will find resources for first home buyers, details about my buyers agent mentoring program.

You can connect with my Sydney based property management and buyers agency teams, Australia wide vendor advocacy, or ask me for introduction to the small group of buyers agents that I would personally recommend across the country. That's veronicamorgan.com.au.

If you're considering a property move such as buying your first home, upgrading, renovating or investing, the team here at Alcove would love to help you think through your decision and get the finance right. Please go to alcove.com.au to reach out.

I wanted to ask you about that, actually, because, you know, again, there's this generational divide. There's those that can't get into the market, those that have been in for decades. And a lot of Gen Zs and millennials are complaining about baby boomers and Gen Xs now.

And the baby boomers and the Gen Xs are saying, look, you know, stop. Stop travelling. Stop bloody spending money. You know, like there's this sort of attitudinal – I don't – you know, I sometimes say these things myself. I think I'm not old enough to be saying those things, but clearly I am.

And yet you've got other – we're talking about multi-generational living arrangements where you've got active support up and down, you know, the age groups. You're sort of saying, you know, and sorry, I'm putting words in your mouth there. You're sort of saying that it's the have not.

So those that are not benefiting from this, they haven't got family and I say wealth, but just owning a family home in some cases could be called wealth, right?

Those who are in that fortunate situation are much more likely to be generous to other generations versus those who feel locked out and they haven't been given, they don't have the privilege of being able to inherit something like that or even be able to be given a hand.

Is that a fair sort of characterisation of it?

Yes, it is.

It's a big challenge there because even though we're living longer and even though we're coming up to, what, four decades now of superannuation, which was supposed to fund people, there is a lot of anxiety amongst some older people as they see themselves live longer and also having to fund a lot more of that, the special care that they might need, some of the medications.

If they need the hip or the knee replaced and they don't want to wait a number of years, they're going to have to self-fund that. And so there is some anxiety for some. Meanwhile, others are going well. The majority of retirement savings or retirement funds come not through superannuation, but property.

And that, I think, will continue to be the case with the next generation. So it's about getting that mix right. It's about recognizing that increasingly there's not going to be that government safety net.

And people have to fund not only their lives, but those longer lives lived at a higher expectation of the post-working years as well. And I think even this plays out into how we're seeing the next generation live out the traditional retirement years, and that is working a little later in life.

We've seen a doubling in the participation rate of the over 65s. In 20 years, it's gone from about 8%. working full-time to now 16%. And so that participation labour force of once retirement life stage is growing and continuing.

And I think in a knowledge economy, we're only going to see that more as we've shifted from manual labour to knowledge work. Older Australians can work later and will increasingly do so.

But it's needed. Like you said, if we've got less young people earning money and paying taxes and more people retired, then obviously we need less people retired, right?

Yes, exactly.

census this year so i mean that's your uh that's your christmas right that's better than the world cup for me this year right um so but 2021 was um that was covid right 2016 they had the crash of the website i'm feeling old so is this the first web the first census in like 15 years that you can but are we gonna have like a world war i mean i'm just obviously touching wood here but we're anxious right and how people are feeling at that time um

So what are you excited about to learn from this census? And have you got like an inkling on what are going to be some of the surprises that people are going to go, oh, wow, we have shifted a lot on these areas?

Yeah, great question to highlight. Well, firstly, 11th of August, put it in the diary, going to be an exciting night, staying up playing in the census form. It is going to be an important one because the last one in 2021 was the first that looked at

living with a long term health condition and found that mental health was the number one health condition Australians face. So it'll just be good longitudinally now to get a track on that. And how are we going in that regard?

It was the census that showed because it was conducted in lockdowns for many states, a massive proportion from single digit, like two or three percent used to work from home. It got up to in the last census.

Well, in some jurisdictions, it was getting close to a third of workers were working from home. So pretty remarkable. So what's been the long-term reality of there? Where is that settled? It was a census that showed massive decline in volunteering.

We were year by year increasing in our volunteering rates across Australia, helping out with local charities or community organisations. And this one turned the corner. And again, it was probably because of census, but it will be interesting to see, you know, are we still the nation that...

that is the nation of the fair go and mateship and helping our community organisations, putting on the sausage sizzle for the fundraisers, that's still who we are. So it'd be good to get a track on that. I think looking at the age profile will be important because we've aged further since then.

Looking at residents where we live now compared to where we were living five years ago, has there been more mobility? And also questions, even the religion question also always gets a bit of interest. adherence to particularly Christianity declining. But is that now slowing?

Are people increasing in these uncertain times in terms of a religious outlook or persuasion? So that'll be one to watch as well. And the good old rental stress and mortgage stress, which is a measure where we're spending 30% or more of our income on either the rent or the mortgage.

Now, that was back in 2021, still a small proportion. But now we know in a capital city, The majority of mortgages are above 30% of earnings. So where are we at there in terms of mortgage or rental stress? Has that hit high levels? Has that become mainstream?

That'll be one to watch as well.

I mean, it's not going to be the rise of the Jedi. Do you remember that back in 2001 as a religion?

But anyway, is it actually, you know, from our listeners' point of view, like the census, like is it good about getting lots of data points, but like the attitudinal sort of how you're feeling, all this sort of, you know, the quantitative and the qualitative, like, you know, where's the sort of things that you wish the census sort of went deeper on and, you know, what does it do really well?

yeah well what it does really well is that it doesn't as a document change very much and so we have a hundred years of census data which is great keep in mind the full name is the census of population and housing and so it's just as much looking at housing it looks at the size of home and the

cost of maintaining that home.

It looks at where we travel from our home to our work, the type of work that we have and the type of earnings that we have, all de-identified, you know, so people don't need to worry about the security of it, but all rich data that shows this pattern of Australia today and how we've changed over the years.

Yes, you know, it'd be great to sort of get a sense on, you know, what's our sentiment towards AI? Are we worried about the future of our jobs? Or what do we think about what education we'll need for the future. But I think that stuff comes and goes.

I mean, they've even dropped, for example, a question that was in there for about 20 years. Do you have an internet connection at your home? We don't really need that anymore because if someone doesn't, what's going on?

Probably most people will fill this in online, digitally, which is even a big turnaround from last time where it was still the minority. So In a five-year window of time, so much changes. And so it's always good to get these half-decade updates of how we're traveling as a nation.

Well, let's go there with AI then. Go on.

You know, you just mentioned it. We're moving from a – that's what knowledge society and knowledge is the number one target for AI. And, you know, basically democratizing it, basically making it free, basically –

whatever knowledge you've got in your brain is no longer that valuable because, you know, AI has got a collective knowledge, right? So, you know, what's your take, right? Are we on the wrong model as a society? Like, is this, are we walking into the grave really?

Or do you think that we'll reinvent ourselves to sort of replace those jobs? Like the optimistic view, but also what's the sort of more worrying view in your mind?

Well, there is growing concern amongst Australians when we track sentiment around technology. You know, if we go back 20 years at the dawn of the digital era, forget the internet, but just digital devices, social media, there was a sense of optimism. You know, Silicon Valley was seen as...

as technology utopians and they were providing for us connectivity and an open conversation and connection with everyone and broaden our worldview and all of that. And that tech optimism quickly turned to tech skepticism.

We now use language as we describe big tech, the way people used to describe big tobacco, creating harms, addictive products, damaging our children. We've seen legislative shifts like banning social media for under 16s for those reasons and it got mainstream support. So Definitely the sentiment tide has turned.

And so the adults, as they look to the world of AI, aren't going to be sort of bitten twice. They're like, I'm taking a critical view. I'm leaning in, but I'm taking a sceptical view. I need to see that this actually is going to be a net benefit, not a net loss.

challenge because the last big promise we were given didn't in the long term deliver. And so that's the sentiment we're seeing. But we're seeing, you know, adults, business people pick up technology, AI, and use the productivity of it to great extent. They're using it as a tool.

But what we're seeing is younger people, and it's always the way, because they've been shaped in the milieu. You know, it's not... They don't have the pre-AI contrast. They don't pick it up as a productivity tool, transact them. They live through it. They're not AI transactors. They're AI integrators.

And so for them, it's an extension of what it is to be human. It becomes a friend and a counselor and an advisor and a colleague as well. So I think we're going to see a difference in how AI is incorporated into our lives from the structured thinking perspective.

Adults who have the 20th century as a reference point, we're bolting on AI into this existence to the young people who have been shaped in it. And so we'll use it in a different way.

And maybe there might be some downsides in that use as well as some possible intuitive upsides that they have.

Are you majorly concerned about our workforce though? Like, you know, the reality is that...

a big portion of those you may know will have to retrain and the time to retrain and what are they going to retrain in and we've got migration and so that whole model of low unemployment employment growth income growth just go get a degree like that model might not be the model and if that's what we're selling to the world that we've got the knowledge we've got universities got the education it's it's not really suitable to this ai world like are you worried about that do you think it's a real risk

Yeah, I think it is, particularly for those that aren't as nimble and able to adapt professionally or career-wise. And just think about the speed of it as well. That's what's challenging for a lot of people.

I mean, it was only a few years ago that a lot of parents were telling their kids, learn coding, putting them on coding cans for robotics. Yeah. Yeah, for sure. And not too many parents are advising their children learn coding these days. That's the speed of the change. ChatGP came to Australia.

It was being engaged late in 2023, so less than three years ago. And now, of course, AI is everywhere and the speed of the change has been phenomenal.

So I think that that is why it's such a disruptor and that we can't really predict what it will bring in three years' time because we're only three years into it and it's already been transformative.

And I think young people will be well-placed to see the future of it and adapt, but they might also...

By not developing the people skills, the critical thinking, the structured thinking, the analytical and indeed critique that technology needs because it is by its nature amoral. It doesn't bring an ethical mindset. It's not what we experience to be human.

And that does require that understanding. separate thinking, that critical or structured thinking. I think that that might be something we need to equip the young people with, but also they will think adeptly and intuitively in the use of AI and they'll bring strengths in that regard as well.

So it's sort of a muscle that we need to use. We use it and our young people need to be aware that they need to use that muscle.

I always think about, you know, driving in cars with more and more safety features, you know, like my car tells me when I'm about to venture into the other lane, you know, before I used to have to pay attention and notice it myself, you know.

If I'm reversing and I've got a camera and I've got two wing mirrors and I've got beepers, if you hit something then there's something seriously wrong.

But, you know, back in the day when I was learning how to drive, I had one wing mirror and nothing else, you know, and I managed to reverse park without hitting anything. So, you know, I'm better at other things perhaps. It's an interesting one.

But we've had a few black swan events in the last 25 years, say. You know, we've had September 11, we've had GFC, we've had COVID.

maybe the Iran war is going to turn into another one. Who knows? But we're sort of on a rolling, rolling shocks, if you like. And nobody likes change, nobody likes disruption, nobody likes uncertainty. And yet we're all going to get used to living with, and obviously AI speeds all that up as well.

Is it fair to say we're getting more of these shocks more frequently? Or am I just one of those? Is, am I applying a cognitive bias that is inappropriate? Yeah.

No, you're right in identifying that. I mean, of course, there's been massive issues in the past, the Great Depression and World War I and World War II.

But what we're seeing now with the broader trends, the geopolitical context, the economic issues of inflation, interest rate challenges, the uncertainties around technology and the disruption of all of that, is that The trends impacting us now are multifactorial. They're more complex. There's more of them.

And secondly, they have accelerated towards us. We're not moving to the future. The future has come at us. And we call these trends disruptors because they take us by surprise. The speed of their arrival and the volume at which they come.

And the third factor is not just the multitude of them and the accelerating nature of these times, but the global influence. We used to sort of be a little immune down under here. We're an island continent. We could manage our own future.

But now if it's happening over there, it's impacting us here more than ever before. And the speed of it. And with a globally connected generation, they're in tune with that even more. So I think that's the nature of our context these days. That's what creates the volatility, the speed of change.

It shortens the life cycle of products or messages. And it means that we've got to keep up and adapt. But I guess one strength that we can have is that Even in the future, the most valuable skills will be those distinctively human ones.

And if we can develop or help our young people develop leadership skills, communication skills, discernment or decision-making skills, understand the complexity of a time and within that context, see a strategy and see opportunity and respond proactively.

That's the strategy, the human skills, the people and leadership skills they're going to need. And that I think will keep us in good stead, even if all the accelerations and the global nature of the trends continue apace.

Mark, I think there's so much going on right now, post-COVID and, you know, interest rates and inflation and, you know, obviously stuff's going on overseas. Like, good luck sort of being a climate warrior right now, right? Like, we've completely lost the focus of it.

How does this sort of stacking of mental capacity, I've just got to worry about my own family and, you know, and why is it, I guess, also causing a problem, right?

Because we are so stuck on the day to day that we're finding it really hard to see too far ahead in the future. And is that just making it really hard for us to do long-term planning when the world just feels so uncertain?

So we're almost forced to not make many future decisions because they're like, I don't even know if I'm going to have a job in two years time. How is this playing out?

Yeah, I think that's right. I think it highlights that we do have to look after those fundamentals. A stable democracy, rule of law, economic independence, national security issues. We sort of had some luxury beliefs there for a while, thinking we didn't have to worry about that. That was all set and forget.

And this has reminded us, actually, no, society can fragment pretty quickly. Uncertainty and fear can get ahead of us and create panic buying and indeed community fragmentation. It's thin threads that keep us in our modern capital democracy running.

And we do need to manage that. Things can spin out of control easily. So we can't take our eye off those fundamentals, even while we look at the longer term impacts.

challenges around proper environmental stewardship and being a good global citizen and ensuring that we're adding value as global contributors. I think we've got to not forget the realities of the fundamentals, even while we look at the longer term opportunities.

Is that one of your fears with social media and just that...

the news source on fake news and you know because if it is a bit of a thread that someone could easily pull and then through without context and target people very easily through platforms rather than through traditional media and then flood them with a the additional evidence like

all of a sudden society can be manipulated so easily through those platforms and then you can cause what we've got today, like, you know, untrust and, you know, uproar.

So is that your big fear when you see that as a demographer, you look at this society and then you see these tools that are getting used to manipulate society and it's quite hard because then it's not the old model, right?

Well, exactly right. I mean, we're in the field of research, which is getting solid evidence together to help organizations or leaders make a decision. You know, we need to be informed. We need that, not just a source of knowledge or information or truth, but multiple sources.

inputs to make sure we're really understanding things. And therefore, we can make evidence-based decisions. We can move forward with a strategy based on the data, based on the reality, not just based on someone's gut or on someone's, some influencer. So we're big believers in that, obviously. And the more we can

research and get facts and information out that's solid, the better that is. And yes, we are in a world where there is asymmetrical power, where an influencer or a fear or a random conspiracy can sort of get its own momentum and suddenly start to change things and lead to consumer behavior that's aberrant.

So we need to be cautious in that regard because, again, democracies require solid leadership and the freedoms and that we have and the options, the opportunities also can create such an openness that populations can be negatively impacted.

So we do need to keep an eye on that and just make sure that we're equipping and empowering the next generation to their lives based on timeless human realities. We see trends where people chase the latest thing or might be some new shiny technology.

But also, we've got to remember that the basic human needs are unchanged. The desire to connect and engage and belong and contribute and have stability, they are timeless. And so we need to understand what it is to be human, even as we adapt to some of these trends and changes of disruption.

Does it make it harder for you to measure these trends and detect them? Is there more fragmentation? I mean, how does it work for you as a demographer?

Yeah, that's true, Veronica. There is more volatility out there. So when we're running studies and you get a pulse as to where people are at in terms of sentiment or attitude or expectation or indeed behaviour, you get more of that volatility over time.

And you also get, there are more segments, more subgroups, more, as you said, fragmentation. So it's not a mainstream culture. There's not just the middle class or middle Australia or does this pass the pop test, you know, because there's a lot more difference out there.

And I think getting a sense across that, across the generational diversity or the cultural diversity or the subgroups or segments, I think is important. So we can really understand what's happening across an electorate or a population. to be able to guide and lead and better inform a more fragmented society.

And if you could point to sort of, is there like one demographic trend that you think policymakers are underestimating? Is there anything in particular you think is being missed?

I think it comes back to the generational segments. We study that a lot and it's quite profound to see how solidly the generational analysis or generational research plays out. If you've got an organization

brand, government, connecting with the next generation in the way they did 15 years ago. It may not work. What spoke the language for millennials may not engage with Generation Z today. What worked a decade ago is not necessarily going to get the same traction these days. So we've got to understand the changes.

Each generation not only is at a different age, and we're talking about the needs of older Australians versus the needs of young couples. Of course, we are who we are generationally because of age, but there's more to it than that. We were shaped in different eras.

And so this generation being shaped in the world of AI and social media is going to have different outlooks as adults and family formers as the previous generation, those of us who grew up maybe with the start of the internet, but certainly not what we have today.

So the times, the events, the experiences in our formative years further shape us.

And we need to understand the impact of that to ensure where are the deficits we need to upskill and train a generation, where are the strengths in which we need to learn from them, and how can we manage a multi-generational, generational transitioning society.

It's been a great chat, Mark. Can you finish us with a property Dumbo just to enlighten us at the end? Just a little story. It doesn't have to be yourself. Just something regarding property that a little bit of a property Dumbo, you know, mistake that could be avoided. Anything comes to mind?

Well, as a demographer, we obviously have been looking at population growth and opportunities. And I've been talking sometimes to property seminars about sort of hotspots where we see demographics.

And certainly pre-pandemic, when we were starting to see early indicators of growth of regional areas, places like southeast Queensland, places like these regional cities outside of the capitals. We were highlighting growth opportunities there when prices were still low.

And someone said to me a little while back, oh, I've loved all your demographic stuff. I've loved all your hotspotting work. We've really enjoyed that and benefited from that in acting on that. You must have done well in the property market. I'm like, hey, I just do the research.

I didn't actually necessarily respond to all of that. So maybe that's a property dumbo. Teaching everyone else, maybe not taking enough advantage in my own right. But yes. The data tells a story and there is a predictable opportunity and I think property investors see that and act on it.

That's classic. So you don't drink your own Kool-Aid.

Mark, that's been a great chat. It's been illuminating and it always is. So I really appreciate your time today.

I appreciate it, Veronica. Chris, great to be with you. Thanks, Mark, and enjoy the census. If you have a question that you'd like us to answer in an upcoming Q&A episode, you can send us a voicemail or written question via the website, theelephantintheroom.com.au, or you can email us directly at questions at theelephantintheroom.com.au.

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