A record number of Australians plan to downsize to boost their retirement funds, according to new research, potentially unlocking more than 33,000 homes over the next five years.
According to national survey conducted by leading property developer Capital Corporation, 56 per cent of downsizers intend to move to a smaller home to free up money for their retirement and reduce housing costs by 2030.
One in four (23 per cent) of those surveyed said planned to scale down to a property within the same price bracket as their current home, with one in six (16 per cent) Australian downsizers expecting to spend between $1m to $2m on their downsized property.
This coincides with the current Sydney median house price of $1.6m.
The research supports a growing trend that Capital Corporation has observed in its new luxury apartment development, The Residences at Wahroonga Estate, with an influx of empty nesters purchasing the two and three-bedroom residences.
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Concept image of The Residences at Wahroonga Estate
The luxury apartment project – estimated to be completed by 2027 – will include 186 homes, new roads, landscaping, and amenities.
Capital Corporation Director, Jim Hunter said the majority of The Residences’ buyers were looking for a “house-like” experience on the upper north shore, trading in a large family home for a lower maintenance lifestyle, security and the freedom to travel.
“It’s clear that many of our buyers are empty nesters living on the upper north shore seeking to improving their quality of life by downsizing from their family home,” he said.
“By enhancing the quality of finishes, providing generous garden amenities, and designing the apartments to feel more like homes, people have gained the confidence to downsize without feeling like they are downgrading in any way.”
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The new apartment project will provide 186 new homes.
According to the Australian Bureau of Statistics, people aged 65 and over make up 17 per cent of the total Australian population.
This figure is set to grow to around 23 per cent by 2063.
With Australia’s population ageing rapidly, the demand for smaller, low maintenance dwellings is on the rise.
Mr Hunter said Capital Corporation’s research showed that many older Australians still face significant housing costs, with 30 per cent of downsizers still paying a mortgage on their current home.
The survey found 40 per cent of respondents in NSW and the ACT wanted to downsize to an apartment and 39 per cent of Baby Boomers nationally (aged 65 years or over) hoped to relocate to a two-or three-bedroom apartment.
Radical plan to remove Boomers
The housing crisis has now also emerged as a cornerstone of the federal election campaign, sparking calls for reforms by the Retirement Living Council (RLC) to unlock 59,576 homes across Australia.
In a recent report, the RLC urges the removal of financial barriers in order to encourage older Australians to ‘rightsize’ and create much-needed housing opportunities for younger families.
According to the Removing Rightsizing Roadblocks report, reforms to the Age Pension assets test and Commonwealth Rent Assistance eligibility could encourage an additional 94,000 seniors to access retirement village housing options by ensuring they are not financially penalised for doing so.
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Daniel Gannon, executive director of the Retirement Living Council.
RLC executive Daniel Gannon said these changes could lead to significant outcomes, including reducing the costs and demand on public housing, hospitals and aged care, while generating $2.95b in stamp duty revenue for state governments.
“Prehistoric policies are locking older Australians in large family homes during a housing crisis when rightsizing initiatives should be front and centre to ease pressure on housing and healthcare systems,” he said.
“It’s absurd that policies written decades ago are expected to keep up with modern day house prices and cost of living. Older Australians risk losing their pension while younger people are in housing limbo.”
Read more on the subject here.
Surprise results of Boomers’ empty houses poll
A social poll asking whether a tax break will help around 60,000 Baby Boomers “rattling around” in large empty houses move on to better digs has had some surprising results.
Born after World War II to the mid 1960s, Baby Boomers have become the wealthiest generation on the planet thanks in large part to astronomical escalation in property prices, and around 60,000 are estimated to be living in homes too large for their needs that they cannot take care of without help – which prompted the question of whether a tax break might help make that decision easier.
The feedback to a social media survey conducted by News Corp came thick and fast.
Around 45 per cent of 1117 people who responded were a clear no on the question of a tax break to move on, 36 per cent were a clear yes, 13 per cent laughed, 5 per cent expressed anger and the rest loved it.
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There are government schemes to help older Aussies stay in their homes as long as they wish, paying for lawnmoving and other help.
Respondent Rachael Hickey commented: “This is ridiculous. People shouldn’t feel like they have to give up their homes they worked hard for” – a view supported by Ruth Griffin who said “their homes were purchased with interest of 18 per cent for a loan. You had to work and save for most, not rely on government”.
There were also calls to look at other options including one by Lamgwynn McLeod saying “stop large scale investment buying! Limit purchasing of Australian properties to Australian citizens! Limit how many investment properties someone can own!”
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