Helping retirees to rightsize would deliver a lot of upsides
Helping just a fraction of seniors to rightsize would deliver millions of dollars to Western Australia’s state budget, match retirees to homes that better suit their lifestyles, and free up housing for families in existing suburbs, says Property Council WA.
Modelling undertaken by Property Council WA in the lead-up to the state election in March has found that helping just five per cent of the state’s seniors to rightsize would have a $179 million impact on the state’s budget. This would climb to $268 million if 7.5 per cent were encouraged to rightsize, and $357 million if 10 per cent made the move.
Sandra Brewer, Executive Director of Property Council WA, says 18 per cent of Western Australia's population is aged 65 and over. Many of these seniors have large amounts of equity locked up in homes that no longer meet their needs.
“Rightsizing helps meet the housing aspirations of older Australians who no longer need to live in large family homes, but who want to remain in the communities they love. We know rightsizing – whether that’s to an apartment or a retirement living village – can enable older Australians to age well ‘in place’ rather than potentially move prematurely into aged care,” Ms Brewer explains.
The Australian Institute of Health and Welfare has found that retirees retain high levels of wealth in their homes – rising to 49 per cent of equity for homeowners aged 75-plus. Most of these Australians choose not to downsize, and they cite transaction costs as one of the biggest barriers.
“Helping older West Australians to rightsize is a huge opportunity, but one that is currently hindered by the equally huge transaction costs – stamp duties, real estate agent fees, conveyancing fees and more – associated with moving house,” Ms Brewer says.
The Property Council proposes a $15,000 bonus – effectively a “last homeowners’ grant” – for eligible rightsizers who purchase either a new apartment or retirement living dwelling.
Such a scheme would stimulate economic activity, support construction and jobs, and incentivise investment in the retirement living sector. It would promote housing mobility and create stamp duty revenue for the state government.
“The focus of financial stimulus in response to COVID-19 sector has been on first home buyers. The HomeBuilder scheme has been an economic workhorse that has maintained a construction pipeline, kept thousands of people in jobs and helped more West Australians gain the keys to their first home,” Ms Brewer says.
“HomeBuilder and companion state incentives have directed most investment towards freestanding homes in greenfield developments. A rightsizers’ grant would rebalance the scales to apartments and retirement living units, while freeing up homes in existing suburbs.”
The Property Council says a 10 per cent rightsizers target is not overly-ambitious. AHURI has found that 40 per cent of potential rightsizers would consider moving if they could find the right home in the right location.
“Perth lays claim to award-winning apartment buildings and nationally-recognised retirement villages. We have the housing choice. Now, we need our next government to step up with incentives that help seniors make the move,” Ms Brewer concludes.
Media contact – Emily Young | M 0475 161 328 | E EYoung@propertycouncil.com.au