Australia's retirees living in properties with more bedrooms than they need are contributing to the nation's crippling housing crisis, and seniors should downsize to free up more space for others in need, one of the nation's top economists says.
With the nation among the worst countries globally when it comes to housing affordability and vacancy rates, experts have long been scratching their heads over ways they can combat the growing issue. A recent report revealed the number of properties available to rent across the country hit a record low in 2023.
Australia's housing crisis hits unprecedented levels
According to data from PopTrack, rental vacancy rates fell 0.14 percentage points in August to hit an unprecedented low of 1.10 per cent, with the share of free rentals now 54 per cent lower compared with pre-pandemic rates.
Economist Michael Blythe said the solution isn't easy, but tough decisions must soon be made before the situation deteriorates further. "It is complicated and we need to make it easier," he told 9 News.
"We talk about a housing shortage in Australia, but what economists will tell you is we've got an excess of bedrooms, just not in the right place... maybe instead of first home buyers, we should be thinking about last home buyers."
In Australia, seniors traditionally have very high rates of home ownership, and though the vast majority have said they prefer to age in place, meaning they wish to stay in their own house or community — according to data from the Productivity Commission — many have also admitted their homes are too big for their needs.
According to 2016 research, one in four seniors aged over 65 said they lived in their private dwellings alone.
Obstacles stopping some seniors from moving
Mr Blythe said an issue stopping those older Aussies who actually do want to downsize is "the lengthy process" and difficulties "freeing up equity".
"They're asset-rich but cash-poor, and we need to find some way to rationalise that," he said. "We need to find a way to generate income for this group and get them into dwellings."
A way around this could be the the Downsizer Contribution Scheme, which allows anyone over 55 can send $300,000 from the sale of their home straight into their super account.
Mr Blythe said it is one of the hidden secrets of downsizing given the returns super funds generate. Online platform downsizer.com is offering a solution for those looking to move to a smaller home, he added.
"It's essentially a deposit bond, so it's not like a reverse mortgage, it's not like bridging loans — all of which are quite expensive," Blythe said.
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