Should older Australians be incentivised to ‘right-size’ their homes to unlock home equity across the country? The Real Estate Institute of Australia (REIA), the Property Council of Australia (PCA) and its Retirement Living Council (RLC) all support the Coalition’s election pledge to do just that.
The housing plan announced by the Coalition would allow for Australians over 55 to boost their superannuation by up to $300,000 if they sell their family home and ‘right-size’ into a smaller property.
While welcoming the Coalition’s election policy, the PCA also said that housing affordability concerns still need to be tackled by increasing housing supply.
PCA chief executive Ken Morrison agreed that helping older Australians “find more suitable homes made sense”. But more action by all governments is required to address the pressing need of housing supply.
“We know many older Australians face barriers to ‘right-sizing’ their housing and these announcements will help people move to a home or a purpose-built age-friendly community that serves their needs better,” Mr Morrison said.
“The measures would also free up larger housing for younger, growing families.
“The Property Council has long advanced solutions to encourage older Australians to right-size their housing and we welcome these Government announcements and the Opposition’s support for them.”
In addition, Mr Morrison said the Coalition’s Super Home Buyer Scheme was “another demand-side measure supporting” home ownership, but that choice of housing was the primary challenge.
“The Government’s own official forecasts predict that housing supply is set to drop by around 35 per cent right at the time population growth is resuming, with the National Housing Finance and Investment Corporation forecasting that by 2032 Australia will be 163,400 homes short of demand,” he said.
“Falling supply and growing demand is a dangerous position for housing affordability.
“While targeted demand-side policies to support aspiring homebuyers are welcome, a supply crunch is coming and this needs be the focus for whoever wins government next Saturday.”
The RLC also welcomed the Coalition’s commitment, and said the path to ‘right-sizing’ older Australians was “critical”.
Executive director of RLC at the PCA, Ben Myers, said the announcement was an “important step” to free up the country’s housing supply to younger and growing families by encouraging older Australians to “find a home that suits them better”.
“Incentivising older Australians to unlock their home equity and right-size into more suitable housing options, especially purpose-built age-friendly communities, is a wise move by government,” Mr Myers said.
“We know many older Australians face barriers to right-sizing their housing and [this] announcement will provide real incentives to encourage people to unlock their home equity and move into a home that supports them to live independently for longer.
“Encouraging older Australians to right-size not only contributes to healthier ageing, it’s also one of the smartest and fastest ways a government can boost much-needed housing supply for families.
“It will see older Australians incentivised to free up homes that are likely to be more affordable and especially well-suited to young families.”
Mr Myers said there also needed to be more supply of purpose-built age-friendly communities to ensure Australians have “affordable and accessible choices”.
“State and local governments are making it very hard to finance and develop new retirement communities in suburbs and regions across Australia,” he said.
“Unless Australia is able to better provide the housing supply and choice that our ageing population needs, affordability and accessibility will be an increasingly dire social and economic issue.
“We know that Australians living in retirement communities are living independently for longer, and they are saving governments over $2 billion annually in reduced health and aged care costs.
“That’s another reason why encouraging right-sizing is a win for all Australians.”
REIA president Hayden Groves commended the Coalition’s plan to free up supply of traditional family homes by lowering the age bracket to 55.
“The tension between superannuation and housing need not be there as the Government’s own Retirement Income Review shows that home ownership is a fundamental pillar for a successful retirement,” Mr Groves said.
Council of the Ageing (COTA) Australia has been approached for comment.
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