A national spotlight on downsizing is urging for more credible alternatives for Australia’s ageing population.
Housing plays a critical role in the physical, psychological and emotional wellbeing of older generations, with home ownership providing long term stability and security, according to the Australian Institute of Health and Welfare.
According to Homesafe Wealth Release, research consistently shows older Australians overwhelmingly prefer to “age in place” remaining in their homes or familiar neighbourhood as they age.
Homesafe Wealth Release CEO Dianne Shepherd said older Australians are repeatedly told that downsizing is the responsible choice, but for many, it is neither practical nor desirable.
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Appropriately designed homes for older Australians accounting for less than half of all new homes built between the 2016 and 2021 Censuses. Pictures: Supplied, Homesafe Wealth Release
“The family home is not just an asset – it is a source of identity, stability and connection,” Ms Sheperd said. “For a growing number of Australians, downsizing means losing far more than square metres.”
According to Homesafe Wealth Release, suitable housing options are limited with smaller, appropriately designed homes for older Australians accounting for less than half of all new homes built between the 2016 and 2021 censuses.
The Downsizing Australia Report (REA Group & GemLife, 2025) found that 85 per cent of older households (aged 55+) have two or more spare bedrooms, yet remain in their family homes because appropriate downsizer housing is not available.
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Dianne Shepherd
Financial barriers place further strain on downsizers, with stamp duty, agent fees, moving and transaction costs often eroding much of the financial gain from selling, according to National Seniors Australia.
According to Ms Shepherd, the broader national discussion needs to better reflect the preferences and realities facing older homeowners.
“Downsizing is not the universal solution,” she said. “Most older Australians want to stay where they are, many cannot afford to move, and the housing market often does not offer what they need.”
Downsizing can also have unintended consequences for Age Pension eligibility.
As a result, more older Aussies are seeking ways to access home equity without leaving their homes.
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Stamp duty, agent fees, moving and transaction costs often eroding much of the financial gain from selling
Ms Shepherd said they are seeing more older Aussies who want to help their children enter the property market but do not want to sell the family home.
This comes as The State of the Older Nation 2025 report reveals that one in four Australians aged over 50 is living in poverty, directly challenging the persistent myth that older Australians are uniformly wealthy.
While many older Australians report improved quality of life since the pandemic, almost half (48 per cent) believe conditions are worsening for people their age, driven largely by rising cost-of-living pressures, healthcare costs and housing affordability.
Ms Shepherd said the findings highlight a growing disconnect between housing wealth and everyday financial resilience.
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For many retirees, their wealth is locked in their home while cashflow pressures continue to rise
“This report confirms what we see every day – many older Australians own their home, but are struggling to manage rising living costs,” she said.
“We need to stop equating home ownership with financial comfort.”
Ms Sheperd said for many retirees, their wealth is locked in their home while cashflow pressures continue to rise.
“This research shows the challenge facing older Australians is not a lack of assets – it’s a lack of accessible income,” she said.
“Policy, products and public conversations need to reflect that reality.”
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The State of the Older Nation 2025 report reveals that one in four Australians aged over 50 is living in poverty
According to Homesafe Wealth Release, the report reinforces the need for retirement solutions that support ageing in place, dignity and financial stability, without forcing older Australians into unnecessary or disruptive housing decisions.
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