Why older Australians are staying put instead of downsizing

Font Size:

Government incentives to downsize are not hitting the mark, with older Australians who reach retirement age preferring to stay in the family home unless declining health forces them to leave, new Australian Housing and Urban Research Institute (AHURI) research shows.

The research, Moving, downsizing and housing equity consumption choices of older Australians analysed the housing decisions of Australians aged over 55 to understand who downsizes or moves, and why.

“Our research shows that older, home owning Australians are generally reluctant to downsize or to spend their housing wealth over the course of their retirement,” says lead researcher Associate Professor Stephen Whelan from the University of Sydney. 

“When such transitions do occur, they tend to be associated with key life events that are not induced by or associated with policy settings; for example, health shocks that require a move into aged care; retiring from the workforce or the death of a partner.”

Around 65 per cent of homeowners aged between 65 and 74 in 2001 were still living in the same home in 2016. For those aged over 75 years in 2001, more than half remained in their original residence 15 years later. In fact, in 2016, 64 per cent of householders aged over 80 still lived in their primary residence.

Prof. Whelan says that while stamp duty and the exemption of the family home from the Age Pension asset test discourage downsizing, most people only consider the move to a smaller place if they become ill or lose a partner.

 




“Economic considerations don’t seem to be critical, but nonetheless we’d argue that policy should take them into account and should be set in a way that facilitates downsizing, if and when it’s appropriate,” Dr Whelan told The New Daily.

Prof. Whelan believes that including a portion of the family home in the asset test and replacing stamp duty with a land tax could make downsizing more attractive.

“If you imagine there’s one million old homeowners who potentially could downsize,” he said.

“These types of changes are not going to affect everyone’s behaviour because, for many people, it will be the death of a spouse or ill health that forces them to downsize.”

The research also shows that, to date, Australians currently aged 55 to 64 are about as likely to own their home as their older counterparts at retirement, although they are less likely to own their home outright and they’ll be more likely to have less equity in their home, which could put a strain on their income streams, such as superannuation or the Age Pension.

Prof. Whelan believes that the growing proportion of people likely to retire without owning their home poses a challenge for policy makers, as the pension was not set at a level to cover private market rental payments.

Are you likely to downsize? Which factors would compel you to leave your primary dwelling?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Beware these pension pitfalls before deciding to downsize

David is considering downsizing but is worried about his pension payments.

Could downsizing save your retirement?

The good, the bad and the ugly of downsizing to save your retirement.

Government must step up for homeowners and renters

Home ownership is a fundamental plank in our retirement income system, but it's crumbling, write

Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

Contact:
LinkedIn
Email

139 Comments

Total Comments: 139
  1. 0
    0

    Basically this idiot is saying penalise people for staying in their home and force them out. Bloody let us alone!!!!

    • 0
      0

      How about we make it mandatory that everyone who retires must move to accommodation most suited to their basic needs?

    • 0
      0

      Couldn’t have said it better OJ21.

    • 0
      0

      OJ

      Totally agree

    • 0
      0

      Fed up with home owners being penalised. It’s the most stressful thing moving house.
      And they have worked hard and gone without to get a house. Leave the, alone !
      Makes me sick. Why work hard in life if your penalised for wanting to stay in the house you’ve worked hard to get. What’s the point in working hard ?
      What’s the point in making your home comfortable for retirement.
      Give up now. Travel the world. Spend spend. Is that what we should aim for ?

    • 0
      0

      If I new how we would be treated when I left school I would have joined the professionally unemployed, bought into a commune inNimbin an I would be comfortably on a full pension now.

    • 0
      0

      Would not be comfortable in Nimbin right now, OJ21. They are surrounded by fire and the situation did not good yesterday. Not too far from it myself and it is bone dry. I do however get your drift about the way we are going and in that you are not wrong.

    • 0
      0

      From my point of view it is better to downsize while you are fit and healthy. Leaving it until you are ill and very elderly and have to move is just toooo hard! I have had experience of someone who left it too late. It was a nightmare for all involved who had to help the lady get out of a 4 bedroom house with all her contents…sorting…throwing out. the moving ..the anguish and stress for the lady..UGH!

  2. 0
    0

    Best thing I ever did, moved into a large motorhome and have never looked back, can live were ever takes our tansy!

    • 0
      0

      With you there Kaz – could think of nothing worse. And have seen far too many of the negatives of this. So many people only talk about, or read about, the wonders of doing this, but the novelty/wonder does wear off. And people are too ashamed or afraid to admit they made a mistake in doing it, and hated it. Age catches up, costs become more – cannot understand these people who complain about the costs to maintain a house, but ignore the costs to maintain their home on the road. Have only just read of someone’s MH motor blowing up – faces a bill of nearly $23,000!!
      I’ve only just recently spoken to a neighbor who luckily decided to rent her house out for 12 months to see if this life was for her. Her son convinced her not to sell but to rent first – within 4 months she was back, admitting she hated it, and for once thanking the heavens she listened to her son. It is NOT cheap! She is now selling her motorhome at a hugely reduced price, and staying with her son till she can get back into her house.
      I also simply cannot understand people selling their home (appreciating asset) for a motor home (depreciating asset).

    • 0
      0

      Good luck when the motorhome breaks down and starts to rust. What then?

    • 0
      0

      I would look at hiring a van for at least 3 months which I will be doing for winter next year if I like it I will be doing it every year I will not sell my place

    • 0
      0

      Agree with Mick and what about illl health?

  3. 0
    0

    Downsizing does not always result with money in the bank. It would cost me to downsize and the smaller place costs more than i would get for my current place. Then there are the visits from kids interstate and the grand kids i need a bigger place not s smaller one.

    • 0
      0

      Yup – got a three bedder house with garage and carport – we are now the local ‘depot’ for a drive to gather basics like water and food for firefighters and evacuees in this area. Amazing how generous people can become …. Griffith is sending cherries and apples and stuff all the way up here to the Mid North Coast…. and footing the bill for transport…

    • 0
      0

      my old mum wants to upsize to a larger property with 4 or 5 bed home, study, gym and swimming pool and undercover parking for visits … build it and they will come. She thought the same thing about a retirement place in NZ that sits vacant for 95% of the time. The idea that it would be cheaper to put visitors up in a hotel seems beyond her comprehension.

  4. 0
    0

    Yes, it is crazy! People like us are living in a large 4 bedroom home with a large garden whilst young people with families are squeezed into small flats. Yes, we had a look at downsizing but after you take out agent fees and the MASSIVE stamp duties then there is not much left, You would end up with a few dollars extra in a crowded “townhouse”. Get rid of stamp duties for over 70-year-olds and build smaller homes suitable and affordable for older Australians. The changes would benefit all, young people would be able to buy homes suitable for families and us oldies would live in smaller dwellings. It would be a win-win situation but the tax greed of Governments will stop it.

    • 0
      0

      Stalin had such a scheme, Ok – it was called Gulags… and Uncle Adolph had his own scheme….

    • 0
      0

      We downsized last year and in Victoria there is no stamp duty if you are over a certain age and the property is under a certain value.
      It has worked for us with a newer, smaller, property and money in the bank for us to use on ourselves. It allowed us to replace our car with a new one that should see us through till we pop our clogs.

    • 0
      0

      We downsized last year and in Victoria there is no stamp duty if you are over a certain age and the property is under a certain value.
      It has worked for us with a newer, smaller, property and money in the bank for us to use on ourselves. It allowed us to replace our car with a new one that should see us through till we pop our clogs.

    • 0
      0

      I’m inclined to agree with you Ok. The gov(state and fed.) seem to want it both ways. Move the seniors out to smaller residences and make way for younger families but then hit us with stamp duty(in SA) and agents fees. We will have to down size soon as we have a 4 br and a large garden but need to wait till we have enough money to ensure we get the right place that is in our budget without impacting on our super.

    • 0
      0

      Like Tanker, no stamp duty problem in Vic. Circumstances forced downsizing from a large, older family home in need of some $$$ maintenance as well as large garden that was becoming increasingly difficult to maintain. Built two new smaller properties that will see us out and still enough leftover to invest.

    • 0
      0

      It’s not really crazy, OK. We live in a decent sized house with a good garden but we started out in a flat not much bigger than our garage. It’s what happens. You start small and work your way up and I object to all the multimillionaires in parliament who own multi dwellings telling me where I should live.

      It’s

    • 0
      0

      Good grief. Its our home – we paid for it. Its not empty. So when the next generation save their money they can buy their own home.
      I would never have suggested to my parents that they should move. In actuality on a selfish side the children’s inheritance benefited enormously by them not wishing to move out. The ones where their parents moved into retirement homes or 50 plus accommodation have nothing at days end – but some wealthy aged care investors are billionaires.

    • 0
      0

      Farside, you have obvious choices which many do not. Why build two homes instead of one bigger home? Investments is not the subject of this discussion. Most people would be left with nothing after a move and a box to live in to boot.
      If we cut our house in half we would have no room for anyone but ourselves. We seem to always be helping someone or hosting family or visitors. My sister has downsized twice and is very unhappy with the result. I learn from her mistake.
      I have seen huge homes and ours is not that but it does have extra room to help others as needed. The nest is never empty really as family come back.
      I doubt this nasty government would upset the oldies as exemplified by the franking credits debacle and oldies are not impacted much with that compared to their home that they spend all their time as they become more frail.

    • 0
      0

      Paddington, not that it’s your business what my circumstances for downsizing were, but my wife and I separated after her cancer treatment and my enforced early retirement. Now we each own a smaller property than the one we shared and raised a family. Hers is in a less affluent suburb (with two adult children, two dogs and a cat) and mine is in the country. Neither house was purchased as an investment.

    • 0
      0

      Farside, I apologise for misunderstanding your motives. I was thinking how I would prefer a bigger house to two small ones but I did not realise you and your wife had separated. That makes sense then. My sister downsized twice which has proven a big mistake for her and that informs my decisions and outlook on this subject. Expecting people to downsize is assuming their values. Our home is comfortable but it would not be if we were in the position that my sister and her husband are in. We are home most of the time so do not want to live in a box. Again sorry for assuming you had chosen investing over comfort.
      Also, we who have property no matter how humble are lucky compared to the renters.

  5. 0
    0

    Because they will not yield to tyranny and greed is good mentality… unlike starving imports, they know they actually have the right to hold on to what they’ve earned from a life of often hard struggle.

    They also know when they are being herded like cattle into doing something they have no wish to do… and even if some oldies feel powerless – the reality is they are not…. and scheming governments know it in their dark hearts…

    Raise the Black Flag – No Prisoners!!

    • 0
      0

      TREBOR – you should start The Australian Oldies Party, membership for people over, say, 50 years and over. We could make a difference possibly. I am a dual citizen and thus not allowed to have a say officially. Remember all the fuss for the sitting Members of Parliament!

    • 0
      0

      OOBP? Official Old Bastard Party?

    • 0
      0

      Ah – but you still vote, Mariner… good thinking..

      I’d need to work on a platform… one problem is I’m not onside with the current debacle of dividend imputation – this needs to be straightened out and the realities introduced over the rhetoric. Reality is that franking is part of total income of shareholder – and must be treated as such – there was and is, therefore, no way it could be ‘tax effective’ for a shareholder without something being wrong with the way it’s being handled.

      By the same token – no small shareholder would lose anything, with or without franking…. IF they are doing their taxes correctly….

    • 0
      0

      Professor Whelan and his cohorts want to screw over senior citizens, he has an agenda as do the LNP.

  6. 0
    0

    Downsized from a big city home to a place in the country 8 years before I got to 65. I have lived on the proceeds without any benefit from Govt. From 65 on I get the age pension. If I would have to downsize now like I did then I’d lose all my entitlements. No one is as silly as that. If the oldies ask their kids whether they should downsize the answer is “NO”; the inheritance is waiting – so I’d ask the kids to pay for my outgoings (rates and maintenance) as it’s going to be their property in the long run. The Govt does not want to make your kids better off. The pressure for downsizing will continue – might become compulsory, who knows?

    • 0
      0

      It’s silly – unless you have massive ‘equity’ and no real need – to ‘downsize’ just for the sake of it…. all you do is cut your own throat since The Good Colonel C’Link will swoop on any ‘extra deemed income’ you would then have from selling your pride and joy to move into a pig in a poke. Many who’ve moved find they are not happy…

      We are not serfs of the government, nor are we in any way beholden to real estate agents or anyone else in ‘business’ and nor are we subject to their ‘needs’ – let them eat cake.

      If governments want more housing available they need to get a real plan going NOW (NOW being about forty years ago).

    • 0
      0

      I ‘went bush’ 30 years ago and commuted to the city – I cannot describe the relief felt in getting close to home after a solid week in the nitty gritty ..

      Oh – NOW for government usually means Not On Weekdays.

    • 0
      0

      Mariner is right to “ask the kids to pay for my outgoings (rates and maintenance) as it’s going to be their property in the long run. The Govt does not want to make your kids better off.” I have had the same conversation with my offspring.

      There is no pressure to downsize unless you are asset rich, cash poor and want to receive social security.

  7. 0
    0

    I’d love to downsize due to financial reasons but my wife says “you’re not selling my house!” She hasn’t worked for 20 years!!

    • 0
      0

      Obviously your wife is happy staying put, not a bad decision after listening to some folks who have done it. Quite often it might mean moving further from their families and friends.

    • 0
      0

      Mrs Sickofit does not have adequate visibility of the financial reasons that downsizing would ease. Stop hiding the pressures she will soon agree with you that life is too short to bear these worries when you don’t have to.

  8. 0
    0

    My mum has wonderful friends in the street where she lives. They give her a lot of practical and social support which enables her to stay. If she were to sell and downsize she could not afford to stay in the area and would need to move to a place where she knows no one and has no support in place.

    • 0
      0

      And that support keeps her happy and healthy and out of aged care. This govt is all over the place!

    • 0
      0

      Yes and once you move out of a lovely area you can never get back in. Why everyone hates retirees and expects them to accept a worse life so someone else can have a better life is a mystery.

      Besides I don’t want to grow the economy any more. It’s quite big, expensive, overcrowded and ugly enough already.

    • 0
      0

      Well – I’ve slept under trees, waded through mud up to my thighs, hunkered down under a fallen tree with the snakes etc in the dark with hostiles running around, worked under a vehicle to repair it in pouring rain, flogged myself seven days a week and up to eighteen hours a day and generally done it the hard way……. I figure I still could offer someone else a free ride….

      I’m only 70 – my turn must come ….

  9. 0
    0

    Down size an excellent idea. Good for the blood sucking real estate agents and the Government on Stamp Duty and any other charges they will put on you. My wife would like to down size to smaller (4 bed 2 Bathrooms, double garage, a good size shed, plus a boat carport) all current at the moment. Any change costs US approx $40,000, any funds left over from the down sizing cannot be put into Super, due to age/or work restrictions. I may not be good at the economy I am not prepared to support the above two blood suckers with my money.
    All these figures are from WA, however other States have variations to charges, how ever the RE mob you have problems to avoid. Most other comments mention the same as I do

    • 0
      0

      Stamp duty and lawyer’s fees you cannot avoid, bobm. But you still can sell and buy property without one of those real estate johnnies. Buying is easier then selling, just managed to buy the place we are in by letter boxing the places we considered moving to. Some elderly lady had to go to a Nursing Home and was only too happy with a cash offer to sell her house. We offered about what was the average in the neighborhood and split the cost of the Real Estate agent which we avoided paying. We saved $2000 and the lady saved $2000. Still needed a solicitor to do the papers and the Govt wanted the stamp duty.

  10. 0
    0

    The money would be nice, assuming I get enough to buy a smaller place in a decent area, but nothing can replace the years of friendships, neighbours, membership of organisations etc that make up the community that keeps me healthy and happy.

    I am really really tired of the bean counters who think money is the be-all and end-all of existence, and who usually have plenty of it so are at no risk of being forced to move, deciding what is best for people whose lives they know absolutely nothing about – except the money stuff, of course.

    No doubt they are asking us to make sacrifices for ‘the greater good’, but since that only means my hard earned savings going to benefit those with much more money than me, I will not be obliging.

    Selling out pensioners because the government will not properly house the population is not my personal problem. This is a political problem and an economic problem created by neo-liberalism and maintained by neo-liberal propaganda.

    I am saving my country money by staying in my home and community rather than becoming a burden through illness and disability – or worse, stored, abused and starved in one of the care homes this government is happy to license so they can get their hands on my home and savings.

    Time for a government that knows the value of things and people instead of just the cost.

    • 0
      0

      Agreed. What about the children of the retirees and grandkids. Their inheritance will buy them a home so all’s well that ends well.

    • 0
      0

      Yes Kaz time to think and fight for our own better lives and better lives for our kid’s and let others get on building their own homes somewhere else. Plenty of land in Australia and they always knew there wasn’t enough water. So put tanks in.

    • 0
      0

      Sad that at the time when we most want to fight no more forever.. we are forced to do so by these scum, Rae, with their attitude that everyone outside their group is a serf to be played like a chess piece.

Load More Comments

FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Finance

Five smart moves for empty nesters

So, the kids have moved out, your home is finally yours again and you have ascended to the rank of...

Lifestyle

Why you turn down the radio when you're trying to park your car?

When you're looking for a destination, you might need to cut down the volume. Shutterstock Simon Lilburn, University of Melbourne...

Technology

Why we can expect smarter healthcare in 2021 and other tech trends

With last year dominated by the COVID-19 pandemic and much the same expected for 2021, it is unsurprising that healthcare...

Mental Health

Drug trial offers rare hope on Alzheimer's disease

There is finally a glimmer of hope in the fight against Alzheimer's, the most common form of dementia, which affects...

Pets

How the pandemic has turbocharged the pet care industry

Pet care is a big business, and the pandemic has made it bigger. An Animal Medicines Australia report says Australians...

Travel News

Australian government divided on lifting overseas travel ban

The federal government is divided about when international air travel will recommence for Australians, as consumers signal their intent to...

Food

Dietitian reveals the breakfast swaps worth making

If you're looking to live a healthier lifestyle, breakfast is a good place to start. It's the first meal of...

Finance News

COVID driving more older Australians into poverty

Many of us who endured lockdowns in Australia are familiar with the surge in energy bills at home. But for...

LOADING MORE ARTICLE...