The rate of property ownership amongst retirees is in rapid decline, partly due to retirees selling their family homes to fund retirement.
By 2050, the rate of retirees who own their homes is set to fall from the current rate of 78 per cent to just two per cent, according to a report produced by the Queensland Council of Social Services (QCOSS).
QCOSS chief executive Mark Henley stated that another key reason for this figure was that people are reaching retirement age when they haven’t paid off the family home.
“The biggest concern with the trend is that by 2050, there is expected to be nearly a tripling of the number of people aged 65 and over, and a large percentage not owning their home,” he said.
The Pensioners Cost of Living Report also outlined the significant cost in renting, particularly for those relying on pensions.
“The cost of renting is already high, as shown in the report. We imagine that an increase in demand will increase this pressure,” a spokesperson from the QCOSS told Residential Property Manager.
Katie Knight, property management director at RE/MAX Success stated that although this is an alarming figure, an increase in ageing Australians transitioning to the rental market would cause an increase in sales of property.
“This could likely have the effect where younger Australians choose to break the rental cycle to move into their own home - thus providing ‘room’ for the influx of older tenants and/or increased investor activity - which will be supported by increased demand and would see a balance across the board,” she told Residential Property Manager.
However, Ms Knight did note that a review was needed to address the ever-increasing compliance costs levied to investors to ensure they are able to achieve quality returns. Ms Knight stated that she had observed a significant increase in the last decade in the number of older tenants renting.
Mr Henley stated that government funds will be under increasing pressure in the future, with the increase in life expectancy extending some retirements to 35 years or longer.
“The government needs to make decisions to put in place mechanisms to support people in retaining their homes because it will take pressure off government in the longer term,” Mr Henley said.
QCOSS spokesperson told Residential Property Manager that the report lists a number of recommendations directed at both the state and federal government, which range from targeted concessions to increasing funding for public and community housing that is age appropriate.