You're overlooking one massive factor here...mortgages.
Banks will not be competing for business. That's not what happens when liquidity dries up and defaults rise, aka a recession. They consolidate loan portfolios and stop lending. Even now as governments are effectively underwriting all debt, banks are still reluctant to lend. It doesn't matter if the housing market crashes 50% the vast majority would still need a mortgage, and that's going to become harder to get, with higher deposit requirements and higher interest rates.
Boomers hit earning age in the 1960s. WW2 was a memory by then and the economy experienced unprecedented and until today unmatched growth, with fairly consistent 4-5%+ annual GDP increases until the 1990s.
‘You’re overlooking one factor here’....
No. I’m applying broad strokes.
- Potential New forms of lending, or greater appetite for different instruments
- Huge sectors (insurance, financial services, etc) giving up bloated office spaces as they’ve just realised people will work from home quite responsibly
- The repurposing of those spaces
- A huge reduction in house prices
- A large amount of housing stock becoming available
So much will happen. Most of it unknown. Holding Pity parties because we have it tough is ridiculous.
You’ve also told me that the boomer generation had forgotten the war in 15 years, at the same time people here are rolling the last GFC into Covid as a double whammy, a 12 year gap.
Change is driven by doers. Not complainers. There are successful paths through challenging time’s and energy spent moving in that direction is more helpful than ‘The Boomers got to buy a house in exchange for doubling the amount of household hours worked, they were so lucky’
* Example : My friends family are already discussing ways to combine existing mortgages into a single entity and aggregate the risk across them all.
