Helping empty nesters
Most of us know an ‘empty nester’.
Often in their early 60s or older, they mostly live in 3, 4 and 5 bedroom houses long after their children have left the family home.
For some, the old family house provides solace and memories of the family from years past, but for others, the big house is kept because any benefits from downsizing are exceeded by the costs.
Around Australia there are tens of thousands of family homes that contain just one or two people.
Transaction costs, and ancillary measures like pension assets tests, provide real disincentives for older Australians to downsize.
It’s one of the reasons why Australians hold their properties for an average of 13 years. According to Deloitte, lower transaction costs could increase turnover and reduce the average holding time to 8 years.
One such measure to encourage housing efficiency is the incentive announced in the Budget to encourage older Australians to downsize by allowing them to deposit up to $300,000 from the sale of their property into their superannuation accounts. This is a good move and the Retirement Living Council (our retirement leadership group, part of the Property Council) is championing how this idea can be extended to also include changes to the pensioner assets tests.
Last week’s Budget made some important decisions relating to housing affordability and infrastructure, but in many cases, the details are yet to be finalised.
This week in Property Australia we look at some of those issues, including the prognosis for new-metro rail investment and inland rail, the next steps for affordable housing and build-to-rent, as well as the government’s announcement regarding changes to the GST and construction.