Dear Generations X and Y: leave ASAP

I'm a baby boomer, and I remember when we were told that the age of automation would mean we could all work 2 hours aday while machines did the work for us!
Now both parents need to work 50+hrs wk operating those machines.
Instead of capital gains tax, I would have thought more rigorous interpretation of present tax laws would cover it. If the definition of a "business" is the intent to produce a taxable income, and plainly a property investment on negative yield has demonstrated little to no possibility of producing a taxable income, then it isn't a business. Is it? Unless the profit planned is the one received when the property is sold. At which point under current tax laws it is taxable. If that is the intent when starting this business.
The other point, about all the houses being owned by baby boomers thus being unavailable, seems to miss the point that they are due to be unloaded as part of the investment realisation. At which point with the age imbalance there is possible/likely to be an oversupply and subsequent drop in price.
No question that same age imbalance is going to cause huge problems

Nice article Bernard, always an interesting read.
And as usual some interesting comments, although some do sound as though they feel victimised.
As few points if I may (P.S. I am Kiwi, and I will return home eventually - hopefully)
Peter in Howick, a person only needs to pays taxes in NZ for 10yrs before being elegible for the full pension - NOT 40 years. And we are the only country in the world this generous.
Rhys in St Heliers,have you heard of dollar cost averaging? or maybe 'buy low and sell high'? or maybe buy when others are fearful, sell when others are greedy! Now has been the time for the NZ super fund to buy because it is a long-term investor. It makes no sense to stop buying when markets are cheap and then to start buying again when they are expensive!
The reason we will struggle to buy a home is not because we are lazy as someone suggests but because homes are a higher multiple of earnings than in the past. That is not our fault.
The baby-boomers have pushed the prices up and they are the ones who drove the lending criteria down, not us!
I can't wait for my generation to control parliament and take control of the Cullen fund.

Totally agree with your diagnosis Bernard.
Unfortunately you will find very similar dynamics at work in many of the western allies who fought in WWII, and who produced the baby boom that followed.
For example, Blair & Brown comprehensively stuffed future generation's finance in Britain (which I left behind with similar feelings not very long ago) after the right wing opened the door to these kind of approaches during my childhood (yes, I'm GenX). Where to go? Emigrating once with this attitude only leads to continued dissatisfaction, always looking for greener grass.
There is no panacea for this. The only obvious thing to me is that the demographic curve in your graph demonstrates that there will be a day when Capital Gains will be applied to property investment, as the young become more powerful in political numbers. Extrapolate dates against this and you have a fairly reliable prediction (give or take 5 years) of a further property crash, and can avoid buying in the run up to that point.
Ignore the hype and find a way around the current system of property-based, delusional wealth creation. Each to his own solution.

Bernard, you need to start thinking instead of recycling buzzwords. Tired ones at that. Those so-called boomers are mature adults and connected members of extended social and family networks.
Most are not selfish, and many will continue some sort of taxable work-and-income activity long into their "retirement". They will help out Gen X and Gen Y, their children and grandchildren, by subsidizing university education, helping with home starts, or maybe just childminding, whenever they are able. When they die, they will leave their wealth and houses to their kids.
As a so-called Gen X'er, I am very happy that my boomer Mother both has a debt-free property and is eligible for a pension. We are all in this together, Bernard; we more than competing economic units fighting for resources in a zero-sum game.

The line is from the government is that increased immigration will sort this problem. However, it looks like there will be few places to leave for as this is a rich and emerging country global problem. See these two articles.
This one is a review of a book, but does outline some of the issues the world faces.
http:/www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=987105&story_id=12847201
The second is a outline of what we are in for in our old age
http:/www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=987105&story_id=11849226