Government policies are encouraging older Australians to stay in their homes, which in turn is making it harder for young people to buy a home, provocative new research has claimed.
A new research paper by the University of South Australia explores generational differences in property tenure in Australia.
The study showed that older generations - namely the so-called Silent Generation (born between 1925 and 1945) and Baby Boomers (born between 1946 and 1964) - were far more likely to be homeowners than younger Australians.
Over three census periods (2006, 2011 and 2016) researchers found that 80 per cent of older generations were long-standing homeowners compared to only about 50 percent of Millennials (born 1981 to 1996).
In addition, the research found 68 per cent of Baby Boomers owned their own home by age 30-34 compared with 50 per cent of Millennials at the same age.
Lead researcher, Dr Braam Lowies says the research highlights how government policies designed to protect one generation, can hinder another.
In Australia, owning your own home has always been the great Aussie dream. But each year, this dream is becoming further out of reach for younger Australians,” Dr Lowies says.
“Australia has an ageing population, the majority of whom report a desire to ‘age in place’ - to live in the community with some independence, rather than in residential care.
“And with growing support from the government – such as home support programs and home care packages – older people can do this with greater confidence and security.
Yet on the other end of the age spectrum, Millennials are finding themselves locked-out of the market as the Silent Generation and Baby Boomers retain a significant portion of the housing stock, much of which has considerable value and development potential due to its lot size and location.
“For Millennials, this limits their housing options, creating severe housing tenure inequalities.
“The consequence is that younger people are frequently compelled to revert to the parental home or the rental market - and this is despite government grants to support first home buyers.”
"Review of policy needed"
Property expert, the University of South Australia’s Peter Rossini, says more nuanced housing policies are needed to address intergenerational differences.
“With more than 15 per cent of the population (3.7 million) aged over 65, and estimations that this will grow to 22 per cent (8.7 million) by 2056, the conundrum of one generation impeding another is not going away any time soon,” Rossini says.
“Having bipolar housing scenarios across generations is a demonstration of how the current system is unbalanced. It’s an unsustainable position and one that requires a review of current housing policy to deliver more refined and considered outcomes for all.”
Comment from our CEO
Downsizing.com.au CEO Amanda Graham said that, while many older Australians were keen to stay in their own homes as an alternative to going into an aged care facility, increasingly more people are now arriving at the retirement stage of life with very large mortgages on their homes which were unsustainable in retirement.
“For many people, selling up to release home equity and moving to lower cost housing is the only way to retire from full time employment. The access to this equity is also a way to help their adult children with home deposits which is increasingly common.
“While increases in property values over the past 30 years mean that homeowners have accumulated significant wealth, at least on paper, the reality is that there are many complex financial decisions to be made which are extremely difficult to navigate.”
“Our own research has found that stamp duty, the way the pension asset and income tests work and the lack of suitable age-appropriate housing are major inhibitors to downsizing,” Ms Graham said.
“Escalating home prices over many years have led to a situation where it is now very difficult for younger generations to buy a home in Australia. This is very much a structural and policy outcome, and it’s not helpful to simply blame older Australians for the housing access issues faced by the rest of the population.”
“The research seems to assume that home care can only be provided for those staying in the family home, and is therefore an inhibitor to downsizing. The reality is that people can continue to receive home care after downsizing, in any type of housing including retirement villages and land lease communities.”
“Home Care is a much more desirable and cost effective alternative to placing older people in an aged care facility as people now live longer and more healthy, active lives than they used to. As our population ages, reducing Home Care support is most definitely not the solution to the question of housing affordability in Australia.”
“There are many other policy responses which can help, including planning for suitable housing stock and asset tests around pension eligibility which better support the downsizing decision of older Australians.
“Framing the discussion as one generation against another can be misleading and unnecessarily inflammatory and doesn’t reflect the reality of why certain housing decisions are made by over 50s.”
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