Removing rightsizing roadblocks

Australia is facing an unprecedented crisis: a rapidly ageing population, a chronic housing supply deficit, and a struggling healthcare system.

If left unaddressed, these pressures will continue to impact Australians of all ages, putting immense strain on public services and the economy.

Governments must pull all available policy levers to mitigate this triple threat, and a key solution lies in encouraging older Australians to ‘rightsize’.

Research shows that facilitating the transition from large family homes to age-friendly retirement communities can inject much-needed housing stock back into the market while alleviating demand on health and aged care systems.

This is a win-win for young families desperate to own their own home, and older Australians who deserve freedom to choose. If that choice is to ‘rightsize’ then it must come without the cost of losing independence.

By 2040, Australia’s over-75 population will surge from two million to 3.7 million – an 85 per cent increase in a decade and a half. Without swift action, the impact on housing supply, healthcare, and aged care will be irreversible.

The Retirement Living Council (RLC) has identified critical reforms to address these challenges through changes to the Age Pension assets test threshold and Commonwealth Rent Assistance (CRA).

These changes, targeted at older Australians with low to moderate wealth, offer a powerful incentive to ‘rightsize’ without financial penalty.

The proposed reforms could free up more than 59,000 homes for younger Australians, encourage 94,000 older Australians to access retirement living housing options, generate $2.9 billion in stamp duty revenue for State Governments, reduce pressure on public housing, hospitals, and aged care facilities, and improve the quality of life for older Australians through age-appropriate living options.

Many retirees remain trapped in an “asset-rich, income-poor” scenario, living in oversized homes that could better serve young families. The financial disincentives to ‘rightsize’ – including harsh pension penalties – force them to stay put, despite the huge benefits of transitioning to retirement communities.

While adjusting the Age Pension test threshold has no direct cost to the Commonwealth, CRA reform does. However, as research demonstrates, these costs are outweighed by substantial savings across the health and aged care sectors. Moreover, stamp duty windfalls for State Governments provide further economic benefits.

As the Australian Government works towards its goal of delivering 1.2 million new homes by 2029 – including independent living units within retirement villages – the proposed reforms offer a direct and rapid way to unlock existing housing stock.

For this strategy to succeed, older Australians must be reassured that ‘rightsizing’ is financially safe – not a decision that results in monetary loss.

With the right policy settings, Australia can create a win-win: healthier and happier retirees, more housing for families, reduced strain on aged care and healthcare, and a stronger economy for all.

The time to act is now.

Research and modelling by

Accessing the report

Removing rightsizing roadblocks is available to Retirement Living Council and Property Council members only, through their online membership portal.

Members, follow these steps to access a copy of the report:

Go to the Property Council website > propertycouncil.com.au
Select the profile icon in the top-right corner to login
Enter your email address and password to login
a. If you can’t remember your password, select ‘Forgot password’ to reset.
b. If you don’t have a profile, select ‘Join’. This will take you through the steps of creating a profile which will link to your company/organisation.
Once logged in, select ‘Downloads’ from the menu on the left
Select ‘Download File’ under ‘Company downloads’ to download the report

By downloading the report, members agree to not distribute outside of their organisation.

Become an RLC member

If your organisation would like access to important work being done by the RLC, including this report, Shared Care, Better Housing for Better Health report and the annual Retirement Census, get in touch with the team to sign up as a member today.

The RLC is the national leadership group for the retirement living sector, championing policies that deliver age-friendly homes and better services in retirement communities across Australia.

The RLC sits within the Property Council’s national advocacy team and is the most powerful voice of the sector, representing for-profit and not-for-profit owners and operators of retirement villages and seniors’ living communities.

We’re excited and energised by the opportunities for the industry and feel enormous pride for the work we do in creating a better future for older Australians.

For more information about membership opportunities available for your business, contact RLC Commercial Director Tomai Morris.

Media Releases

Media

Adelaide real estate now Australia’s second least affordable | The Advertiser

Resources

Age Pension and Commonwealth Rent Assistance Reform

April 2025
Commissioned by the Retirement Living Council

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