PFIS Housing Affordability v2

Recent articles on housing affordability focus on first time home buyers being priced out of the real estate market.  

What gets a lot less press, but may be even more important, is the affect this is having on the 50+ Australian population.  

There is a pervasive assumption that people over 50 are well-off, and own their own home outright. Thus, they can look forward to a financially comfortable retirement, with many choices for senior housing.

In reality, the situation is much different for most over-50’s. Divorce, periods of unemployment, and/or unexpected blows to life savings, such as during the recent financial crisis, have left many seniors in precarious financial positions. They have difficult choices ahead in which even downsizing options are limited.

In a study entitled Downsizing Amongst Older Australians commissioned by the Australian Housing and Urban Research Institute (AHURI), findings revealed that housing availability and affordability are the two key barriers to downsizing for older people.

With 25 per cent of Australia’s population now aged 55 or over, and that percentage rising fast, Governments have a hard task ahead to provide for the affordable housing needs of an aging population who do not have the financial means to support themselves in their current lifestyle.  And the results could be devastating for our oldest citizens.

In a recent article published by DPS Guide to Aged Care, Mary Wood, Retirement Living Council Director, commented:

“There are many senior Australians who are deterred now from downsizing, and thereby more prone to loneliness and isolation. Independent private housing designed for seniors, like retirement villages, have proven positive health and wellbeing effects. People who wish to make that move should be supported, not discouraged.”

The conclusions of the AHURI study concur. Their recommendations for steps to be taken and resources that should be made available to make housing for seniors more affordable include:

 

  • Providing more specialised services to assist older people in the moving/downsizing process, including forward planning for housing and care needs, financial advice and assistance in the moving process.

 

  • Providing better information and guidance on housing choices and the practical aspects of downsizing.

 

  • Removing financial disincentives to downsizing, including those related to the purchase and transfer of housing (e.g. stamp duty) and eligibility for the Age Pension.

 

  • Fostering innovation within the housing industry focusing on senior housing.

 

We encourage all seniors, no matter what their financial status, to understand their options.  As Senior Real Estate Specialists we can help, by offering the services of the first two recommendations, above, for our clients and their families. With our training and network of professionals, we provide comprehensive services to help our clients be informed, plan, evaluate options, and proceed with the move.

The second two bullet points from the AHURI study are of course policy issues not under our control. One argument continues that if Australia were to make downsizing more affordable for all seniors, the result would be twofold: seniors would comfortably transition into smaller homes, and the larger homes would be released to the marketplace.

We are certainly keeping our eyes on all developments, because our focus is on improving the experience seniors, and their families, have as they look to this major life transition. As we learn more we will write about it here.

We would love to hear your experiences and your ideas on the best solutions for seniors housing, as either a senior yourself or the family of elderly parents who are struggling. Please feel free to comment here, or to email us directly at success@propertyfocusinsydney.com.au

 

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