• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

SuperGuide

Superannuation and retirement planning information

  • SuperGuide Premium
  • Account
  • Log In
  • SuperGuide Premium
  • Account
  • Log In
  • How super works
    • Super for beginners
    • Super rules
    • Employers guide to super
    • Super contributions
    • Super and tax
    • Accessing super
    • Super news
    • Women and super
    • Super tips and strategies
    • How-to guides
    • Super quizzes
    • Superannuation Q&As
    • Superannuation glossary
  • Super funds
    • Best performing super funds
    • Super fund rankings
    • Best performing pension funds
    • Pension fund rankings
    • Super fund average returns
    • Super investing strategies
    • Comparing super funds
    • Choosing a super fund
    • Choosing an investment option
    • Super fund fees
    • Insurance and super
    • Super fund profiles
  • SMSFs
    • SMSFs for beginners
    • SMSF administration
    • SMSF checklists
    • SMSF compliance
    • SMSF investing
    • SMSF pensions
    • SMSF strategies
    • SMSF Q&As
  • Plan your retirement
    • Retirement planning for beginners
    • When should I retire?
    • How long will I live?
    • How much super do I need?
    • Will I get the Age Pension?
    • How much will I spend in retirement?
    • Financial advice
    • Retiring overseas
    • Preparing for retirement
    • Retirement planning strategies
    • Retirement calculators and reckoners
  • In retirement
    • Income in retirement
    • Super lump sums
    • Super pensions
    • Age Pension
    • Working in retirement
    • Life in retirement
    • Senior concessions and services
    • Aged care
    • Estate planning
    • Super death benefits

Home / How super works / Super news / Older and poorer: Retirement Income Review can’t ignore the changing role of home

Older and poorer: Retirement Income Review can’t ignore the changing role of home

February 25, 2020 by The Conversation Leave a Comment

Reading time: 4 minutes

On this page

  • Failing to meet retirees’ needs
  • Home’s greatest value is social
  • Suitable housing choices in short supply

By Emma Dawson, University of Melbourne and Myfan Jordan, La Trobe University

The assumption that retired people have minimal housing costs underpins the settings of our retirement incomes system. But the real state of housing for older Australians today makes it critical for the Retirement Incomes Review to look at the evidence that now challenges this assumption.

When announcing the terms of reference, federal government ministers acknowledged the critical role of the home in a good retirement by including it in the third pillar of the system, voluntary saving.

The fact is the soaring costs of land and housing in Australia over the past three decades have effectively destroyed the asset base on which our retirement income system relies.

The proportion of home owners aged 55 to 64 years who owe money on a mortgage has more than tripled from 14% in 1990 to 47% in 2015. The rate has doubled among those aged 45 to 54, as has the ratio of mortgage debt to income (from 82% to 169%). This ratio has blown out from 72% to 132% for those in their last decade before the retirement age.

These debts will greatly reduce retirement incomes. The impact will only grow as successive generations take much longer to enter the property market and live with higher housing debt much later in life than previous generations.


Advertisement
SuperGuide Premium is ad-free

The numbers of older Australians who have never owned a home, or have fallen out of home ownership before retirement, have also exploded. In particular, older women (55-plus) in private rental housing grew in number by an extraordinary 39% between 2006 and 2011.

This trend is directly linked to a 28% rise in homelessness among older Australians over the same period. Women over 55 are the fastest-growing cohort at risk of homelessness.

Projected changes in housing tenures of older Australians between 2016 and 2031.
Source: Rachel Ong ViforJ et al, calculations from HILDA Survey and ABS population projections, CC BY

Failing to meet retirees’ needs

The housing market is clearly failing older people. Any consideration of retirement incomes must grapple urgently with the implications this will have for retirees.

Australian policymakers currently take a segmented approach to housing for older people.

The retirement village model is expensive to enter and to exit. It’s the preferred housing model for just 8% of retirees.

“Down-sized” units often provide unsuitable multi-level accommodation and lack the amenities older people need to thrive. As a result, these units often fail to attract older buyers.

Compare super funds

Read more...

Advertisement

Stamp duties are another barrier.

As a result, many older people stay in large homes they find increasingly difficult to manage and which would better suit young families.

Home’s greatest value is social

To fully understand the role of home in providing a comfortable and dignified retirement, the review panel has to go beyond traditional concepts of housing as a financial asset. It must consider the full emotional and social role of home in the lives of older people. Per Capita’s Centre for Applied Policy in Positive Ageing in collaboration with The Australian Centre for Social Innovation is launching the Home for Good project today.

The real value of the home for older people isn’t financial, research by The Australian Centre for Social Innovation shows. Its greatest value is as a safe and private space from which to connect with the outside world, express identity and build social relationships.

Recent research by the Centre for Applied Policy in Positive Ageing at Per Capita confirmed older people experience home as a social as well as financial asset. Exploring models of co-housing with older women, we found even women in secure housing, such as home owners or public housing tenants, would move to other housing that offered a sense of belonging within a connected community.

In the economic narrative that drives policy thinking about housing in Australia, we lose sight of this intrinsic link between home and community. Policymakers are confusing an attachment to the bricks and mortar of the family home with the desire for a socially located space that suits the occupants’ age and abilities and is connected to community.

Advertisement

That older people are not emotionally wedded to the family home, but rather seeking communities of belonging, challenges traditional assumptions about ageing in place.

Suitable housing choices in short supply

Australian Housing and Urban Research Institute (AHURI) research has confirmed older Australians are willing to move from the family home to ideal housing. The research found a “housing aspiration gap” between the desires of older Australians for homes in small, regional towns and policy settings that prioritise the family home.

The research doesn’t explore why traditional neighbourhoods are no longer meeting the demands of older people. However, we do know gentrification and increasing density have remodelled many suburbs. Many older people are vulnerable to isolation as families and neighbours move away and the pace and character of community life change.

Well-travelled and consumer-savvy baby boomers might also be more open to seeking alternatives to staying put.

Whatever the motives, older Australians have a clear need for more diverse housing options.

We need to develop a bolder vision for housing in retirement, to move beyond an economic framing of housing wealth to one that enables us to build connected and vibrant communities that support people to age well.


Advertisement

This demands we rethink models of home ownership, developing financial and legal products that support shared equity and co-ownership, and diversify development models, encouraging the housing choices for which older people are crying out.

As many more retirees remain in rental properties into old age, we must also find ways to increase tenant control and provide secure tenure. We need uniform tenancy laws covering private rental housing across the nation.

And we must actively design neighbourhoods that encourage neighbourliness, combining privacy with informal networks of social and practical support, companionship and care.

Achieving these changes begins with accepting that every Australian has a right to secure housing. Like health care, a secure and stable home is fundamental to quality of life. It should be delivered as a universal basic service.

It will take significant reform before we have a housing system in which Australians of all ages and abilities live in thriving, connected and safe neighbourhoods.

This shift from housing as a commodity to home as a community will take time, investment and, most importantly, imagination, but the potential for Australia to build a world-standard housing system for retirees is there for the taking.


Per Capita’s Centre for Applied Policy in Positive Ageing is launching its Home for Good project in collaboration with The Australian Centre for Social Innovation today. Read more about the project here.

This article was co-authored by Kerry Jones, Director: Systems Initiatives, at The Australian Centre for Social Innovation. The centre is generously supported by the Wicking Trust.

Emma Dawson, Honorary Fellow, School of Social and Political Sciences, University of Melbourne and Myfan Jordan, Associate, Health Ageing Research Group (HARG), La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Boost your retirement with a SuperGuide Premium subscription

SuperGuide Premium is your independent expert on superannuation and retirement planning. Learn how much super you could need, what are the best performing super and pension funds, how to run an SMSF, the latest super rates and thresholds, contributions guides, and super rules and strategies.

Includes performance rankings for 235 super funds and 166 pension funds, more than 600 articles, how-to guides, checklists, tips, calculators, case studies, quizzes and a monthly newsletter.

Find out more


Learn more about retirement income in the following SuperGuide articles:

10 common ‘myth-conceptions’ about retirement income

February 10, 2021

Reverse mortgages: What are they and how do they work?

December 2, 2020

How to maximise your Age Pension

September 17, 2020

What is the Pension Loans Scheme, and how does it work?

September 2, 2020

Rules of Thumb: Do these popular retirement planning hacks measure up?

May 7, 2020

How can you plan your income needs in retirement?

April 1, 2020

Worried about your post-virus finances? 10 tips to help stretch your retirement dollars

April 1, 2020

Is a bucket strategy the solution for your retirement income plan?

March 23, 2020

How much super do I need to retire?

February 11, 2020

How inflation affects your retirement income forecast

August 10, 2019

‘Today’s Dollars’: The impact of inflation on retirement income

April 8, 2019

Retirement income in Australia: An overview

February 18, 2019

Target retirement income: An explanation of the 66-80% rule of thumb

February 8, 2019

Related topics

How super works Super news

IMPORTANT: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Learn more

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

How super works
Super for beginners
Super rules
Employers guide to super
Super contributions
Super and tax
Accessing super
Super news
Women and super
Super tips and strategies
How-to guides
Super quizzes
Superannuation Q&As
Superannuation glossary
Super funds
Best performing super funds
Super fund rankings
Best performing pension funds
Pension fund rankings
Super fund average returns
Super investing strategies
Comparing super funds
Choosing a super fund
Choosing an investment option
Super fund fees
Insurance and super
Super fund profiles
SMSFs
SMSFs for beginners
SMSF administration
SMSF checklists
SMSF compliance
SMSF investing
SMSF pensions
SMSF strategies
SMSF Q&As
Plan your retirement
Retirement planning for beginners
When should I retire?
How long will I live?
How much super do I need?
Will I get the Age Pension?
How much will I spend in retirement?
Financial advice
Retiring overseas
Preparing for retirement
Retirement planning strategies
Retirement calculators and reckoners
In retirement
Income in retirement
Super lump sums
Super pensions
Age Pension
Working in retirement
Life in retirement
Senior concessions and services
Aged care
Estate planning
Super death benefits
Advertisement
Compare super funds

Footer

Important: Disclaimer

All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs.

You should consider whether any information on SuperGuide is appropriate to you before acting on it.

If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.

Learn more

About SuperGuide

SuperGuide is Australia’s leading superannuation and retirement planning website. Learn more

Superguide Pty Ltd ATF Superguide Unit Trust as a Corporate Authorised Representative (CAR) is a Corporate Authorised Representative of Independent Financial Advisers Australia, AFSL 464629

  • Contact us
  • Advertise on SuperGuide
  • Careers

Before using this website

  • New to SuperGuide?
  • Terms and Conditions of Use
  • Financial Services Guide
  • Privacy Policy and Privacy Collection
  • Copyright Policy
  • Editorial Policy and Complaints
  • Disclaimer

  • SuperGuide Premium
  • Subscriber feedback
  • Sitemap