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Thursday, October 13, 2005


Edward Hugh

Thanks a lot for this, as you can probably imagine I just love the issues Cerny, Miles and Schmidt talk about. Clearly pension reform will have a marked impact on private saving. It is hard to disagree with this:

"The links between the property market, demographic change and pension reform seem to be significant. The key policy conclusion from this paper is that the knock-on effect upon the housing market of demographic shifts and reform of the pension system is likely to be substantial."

However - looking at the fact that in ageing societies like Japan and Germany beyond a certain point property values seem to remain extraordinarily flat I am somewhat sceptical about this finding:

"But one thing all our scenarios have in common is that the importance of owner occupied property in overall portfolios declines over time. This is despite the fact that owner occupation rates continue to rise as do real house prices."

It's the real house price *rise* I'm not convinced of, but then ageing in the UK (partly due to all that immigration that worries poor Polly, will be considerably more benign than in the worst affected countries.

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