I never said 10%. That was Taxing, and then only by way of example, rather than by way of a considered prediction.
In response to your queries:
1) The wealth transfer (or trans-generational) effect is all about the circumstances, and rate at which wealth will be transferred by way of inheritance from the pre-War and early stage baby boomers, to their families (etc). For more information on this, there are various reports that can be found at Treasury's website, and again at the Reserve Bank's website. Submissions to several of the hearings of the Senate Select Committee on Superannuation, and to the recent House inquiry into Aging.
2) My superannuation comment was: "The superannuation /savings effort of most ordinary Australians". I, therefore, did not say that superannuation was being diverted into investment properties, etc. I did, however, say that Australians (primarily through superannuation) are now returning to a savings habit which (whilst low compared to the standards of the 60s and 70s) has reversed the decline of the 70s and 80s. This habit increases the potential for choice upon retirement, as opposed to having to divest existing assets in order to maintain lifestyles, etc. That also means increased exercise of choice and selection of property upon retirement (whether by way of down-sizing, location, moving into the CBD, lifestyle locations, etc).
3) CGT modelling demonstrates that the 1/2 rate applicable to CGT is only marginally better than having an inflation adjusted cost base. Indeed, once you get back above an inflation rate of 3.5 -4%, the 1/2 rate turns decidedly negative (ie: CGT will eat into your real capital base). The "relative tax advantages of home ownership" are, therefore, still there.
4) It is hard to say at what rate AWE will increase, but as AWE approaches the 43%, and then 47% marginal rate tax bands, then the pressure will be on to either increase the tax thresholds, or to cave in to union demands for wage increases. That, together with an increasing employment shortage that will be entirely evident by /before 2005, will drive AWE up in the 2nd half of the decade, and with it, inflation.
5) I will come back to you with the figures on this.
6) Your comment: "The population growth of slightly over 1% is rather insignificant, imho".
Quite possibly, yes.
But, at 1.1% (in FY02), Australia's population growth rate is just under the global population growth rate of 1.2%.
As for "the increased vacancy rate of 4% in Sydney tells me that there are more dwellings than there is demand", that tells me more about the vagaries of the supply and demand cycle and the lead times involved in developing new residential (ie: apartment ) projects.
I'm, therefore, more interested in knowing whether the vacancy rate in 2005, going on 2006, is 4%, or whether it is closer to the "in-balance" rate of 2.5 -3%.
7) Yes, they do, as my further response to Rod demonstrates.
