The Australian Government has long supported the younger generations’ ambitions to own their own home.
First home buyers’ grants and stamp duty and mortgage insurance concessions are all part and parcel of the incentives to drive ownership.
Now, in the midst of the COVID-19 economic landscape and in a bid to support the construction industry, the Government’s HomeBuilder grant provides eligible owner-occupiers with a grant of $25,000 to build a new home (or renovate an existing home).
This is the first time a home ownership grant has ever been made to a pensioner and is arguably long overdue.
But like all good things, this comes to an end on December 31 and for retirees not yet ready to consider downsizing, it is an opportunity likely to pass them by.
However, what remains is a strong case for continuing this grant in the form of a ‘Last Home Buyers Grant’; providing financial support for retired Australians to downsize.
If Baby Boomers were incentivised to downsize in the same way that Millennials were incentivised to buy, could this address the undersupply of affordable housing in Australia?
A fair go for all
Providing Australians with a fair go has long been the battle cry of Governments across all parties for decades.
The emphasis on owning your own home has consistently formed a part of this mandate and there is no shortage of Government support for those looking to purchase their first home.
But this largely ignores the fact that we need good supply in order to be able to buy at a fair and affordable price.
With an estimated three million empty bedrooms in Australia every night, the case for the Last Home Buyers Grant is compelling.
Many Baby Boomers remain in properties bought to suit their growing families 30 years ago, seeing out their retirements maintaining four-bedroom homes and quarter acre gardens to the detriment of their golden years.
A lack of incentive for older Australians to contemplate downsizing impedes any motivation to consider changing their living arrangements.
The costs associated with selling, buying and moving remain a hurdle to many, resulting in the continued short supply of family housing.
Shifting the paradigm
With the perceived moving costs as a motivating factor to stay in larger homes, a grant to negate this stumbling block is a clever first-step into easing our housing affordability crisis.
Incentives such as a Last Home Buyers Grant would likely herald a shift in attitude to those determined to remain in their oversized homes.
These retirees could begin to view the positives of cashing out in a different light; able to imagine a simpler lifestyle without the burdens of a high maintenance home.
A smaller home does not imply a smaller life; rather a fuller life free from the fetters of mowing a lawn or dusting another empty bedroom.
Rather than grinding this economic kickstart to a halt, maintaining the grant in some form would continue the ripple effects across all aspects of the property and construction industry including real estate agents, developers, architects, builders and removalists.
Now is the time for the Australian Government to pivot their fair go home owning initiatives to include senior Australians on an ongoing basis.
With most Baby Boomers never having had the opportunity to access a First Home Buyers Grant and paying taxes their whole working lives, facilitating their transition to homes suitable to their needs seems worthy of the Government’s attention.
- James Kelly is the Managing Director of Lifestyle Communities, which is a major Victorian-based provider of over 50s residential land lease communities.