Report from AHURI outlines how retirement-age home owners are reluctant to move out of the family home.
A new report from the Australian Housing and Urban Research Institute (AHURI), ‘Moving, Downsizing and Housing Equity Consumption Choices of Older Australians’, has outlined how retirement-age Australian home owners are unlikely and reluctant to move out of the family home, and spend their housing wealth in retirement unless they have to, typically due to serious health reasons.
Economic considerations are negligible
The report highlights that most people only consider downsizing and spend their wealth in retirement if they incur a key life event such as becoming unwell or losing a partner, not due to policy or tax changes. Economic considerations do not appear to be the primary reason for the decision-making in downsizing.
The research also showed Australians aged 55-64 were as likely to be homeowners as their older counterparts in retirement (65+) but were less likely to own their home outright and had less equity. People often want to stay in a neighbourhood they are familiar with, and where friends, family and services are close by.
The report adds that the primary barrier to downsizing is a shortage of suitable properties in the appropriate areas for downsizing; the diversity of new housing currently being delivered needs to more readily meet the aspirations of those who will live in them; and that there is an unmet demand for smaller dwellings, particularly among homeowners.
Stamp duty is an issue
Shelter WA CEO Michelle Mackenzie commented on the report stating, “What we need is not only more supply of housing in Western Australia, but diversity in the type and locations of housing stock so people have genuine options and reduced barriers.”
“In terms of fiscal policy settings, a great start would be to replace stamp duty with a broad-based progressive land tax and reduce the concessional treatment of owner-occupied housing in the age pension eligibility rules.”
For more information, the report by AHURI can be found here.