Property prices decline as English-speaking population ages

Property prices in English-speaking countries could decline as the global population begins to age, it has been claimed.

According to new research from the Bank for International Settlements, house prices are affected by people's consumption and saving patterns, which change as populations age.

Economist Elod Takats, author of the bank's latest study, said: "If the economy is ageing, i.e. the subsequent young generation is relatively smaller, then asset prices decline."

He claimed that the fall in asset prices would be particularly noticeable in English-speaking, developed, western nations - which highlights the benefits of investing in foreign property in non-English-speaking regions, such as Estonia, Romania and Bulgaria.

"In the past 40 years, [developed] economies have experienced the positive impact of ageing. As baby boomers reached working age and started buying housing, they pushed up property prices," Mr Takats said.

In the short-term, the picture is very different, however, with property prices in Australia soaring by almost 20 per cent in the past 12 months.

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