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Most older Australians want to retire where they are

As Australia’s population gets older, more people are confronted with a choice: retire where they are or seek new horizons elsewhere.

Choosing to grow old in your existing home or neighbourhood is known as 'ageing in place'. It enables older people to stay connected to their community and maintain familiarity with their surroundings.

For many, the decision to 'age in place' will be tied to their connection to the family home. But for many, secure and affordable housing is increasingly beyond reach. This choice may then be impeded by a lack of suitable accommodation in their current or desired neighbourhoods.

Our recently published study asks what motivates older homeowners and renters to age in place or relocate, and what factors disrupt these preferences. It suggests older renters are often not given a fair choice.

Most older Australians want to age in place

Having the option to age in place enables older people to retain autonomy over their lifestyles and identity, promoting emotional wellbeing.

Using 20 years of data from the government-funded Household, Income and Labour Dynamics in Australia (HILDA) survey, we tracked the preferences of Australians aged 55 and over.

Encouragingly, most older Australians are already where they want to be.

Two-thirds (67%) of respondents strongly preferred to stay in their current neighbourhood, and an additional one-fifth (19%) had a moderate preference to stay.

Only 6% showed a moderate or strong desire to leave. Ageing in place is then the natural choice for a vast majority of older Australians.

Our study highlights several motivations for people to stay put as they retire.

For homeowners, family ties matter. Owners with children residing nearby were around one and a half times more likely to have a higher preference to stay.

Older owners might then have a reason to call on their substantial housing wealth and keep their children nearby via the “bank of mum and dad”.

For renters, how long they stay is important. Those renting their home for 10 years or more were 1.7 times more likely to have a higher preference to stay than short-term renters.

Renters face the most disruption

The survey enabled us to follow where older people lived a year after they provided their preferences. This helped us gauge how often they turned their desires into reality.

The chart below indicates that private renters face greater obstacles to ageing in place.

Around one in 10 private renters that desired to age in place were disrupted – they wanted to stay in their neighbourhood but didn’t. This suggests they moved out of their neighbourhood involuntarily.

Only 2% of homeowners and social renters experienced the same disruption. However, for those in these tenures that did not desire to age in place, involuntary immobility was a greater concern. Only 15% of those that wanted to leave succeeded, leaving the vast majority “stuck in place”.

The private rental market is the least secure of tenures, and so private tenants are often exposed to involuntary moves. Australia’s private rental system is lightly regulated compared to many other countries, creating tenure insecurity concerns.

On the other hand, social renters were particularly susceptible to involuntary immobility. Social housing is scarce in Australia and subject to lengthy waiting lists. A neighbourhood move often requires transferring to the less affordable and less secure private rental housing.

Even after considering financial status, social renters were four times as likely to be stuck as compared to private renters. Social tenants are strongly deterred from moving in the current system.

How can we support older Australians’ preferences?

Our study exposes some barriers in the housing system that hinder people from being able to age in place, or move when they want to. Clearly, older renters enjoy fewer protections against disruptions to their preferences to age in place than older owners.

For private renters, tenure insecurity in the private rental sector is a key reform priority. This can be achieved through stronger regulation that improves tenants’ rights. For example, more states could adopt recent regulatory rental reforms that support the rights of pet owners and protect against no-grounds evictions.

A man sits on a couch looking away into the distance

A man sits on a couch looking away into the distance

While social housing can provide older Australians with more security, it can also be hard to move. Shutterstock


Large numbers of older private renters also face severe rental stress, which may force them to move from their preferred neighbourhood. Commonwealth rent assistance reform would alleviate some of this stress through an increase in rates and better targeting.

An increase in the supply of social housing would play an important role in improving both tenure security and housing affordability. Older social renters enjoy fewer obstacles to ageing in place than older private renters.

However, if social renters want to move into the private rental market to relocate, they face difficulty securing accommodation. This will likely discourage moves as it would require sacrificing the tenure security offered by social housing. However, policy initiatives that improve the quality of the public housing stock can reduce feelings of being stuck.

As homeownership rates decline both among young people and those nearing retirement, we can expect the population of older renters to grow.

Overall, our findings support a strong case for policy reform in the rental sectors to address the needs and preferences of older renters.The Conversation

 

Christopher Phelps, Research Fellow, School of Accounting, Economics and Finance, Curtin University; Rachel Ong ViforJ, ARC Future Fellow & Professor of Economics, Curtin University, and William Clark, Research Professor of Geography, University of California, Los Angeles

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

 

13 Comments
June
January 19, 2024

After over 35 years of owning residential rentals we decided to get out. We had tenants who were in our properties so long, they died there, almost literally! And, we rented to them below market and looked after them as we valued how they took care of our properties and enjoyed their home. However, the erosion of things we were previously able to claim, such as travel costs to inspect our regional properties (even to organise repairs etc.), the erosion of landlords rights and the ever more prevalent, "fat cats" label being bandied around, took its toll and we just said "to hell with it"! We had mortgages ourselves on those rental properties for years, but still kept our rents below what we could have achieved and kept our properties well maintained. There are many reasons why there is a housing crisis, not the least of which is housing affordability, but take away the incentive and rationale behind stretching yourself to put properties into the rental pool, and you will decide "NO"!

Lester Pearce
January 21, 2024

Hear hear

Lyn
January 25, 2024

Instead of convoluted reforms where a one- size fit all to both sides probably isn't achievable, how about a register of repeatedly poor landlords reported so tenants can identify those to avoid? Then allow them to be de-registered after a period of non-complaint similar to driver- licensing restoration of points in hope they have rectified complaints. Many good landlords like June above may not then leave the market.

John
January 19, 2024

"For private renters, tenure insecurity in the private rental sector is a key reform priority. This can be achieved through stronger regulation that improves tenants’ rights".

When will we learn that increasing tenant rights inevitably means reducing property owner rights? With governments increasing taxes/duties/rates/levies/surcharges on residential property and mortgage rates now much higher, housing is expected to underperform the stock market. This will discourage new investors. Why hit the remaining property investors with new constraints that will encourage them to exit the market? Plenty of evidence of that already in VIC.

Pauljk
January 19, 2024

Spot on John. With increasing tenants rights, land tax increases, rising insurance costs etc, I'll be cashing in and washing my hands of our long term investment properties. Chances are high they will be sold to owner occupiers and not rented, increasing the rental shortage problem.

TheBigShow
January 19, 2024

This doesn't make sense. If an owner occupier does not own a house, would they not be a renter? Thus the net effect is nil?

One more owner occupier = one less renter?

John
January 20, 2024

Once you have a long term investment property it is usually positively geared and hence become less tax effective while held. So you sell, like we did. The new investor can gear it to the hilt. The cycle then continues.

Disgruntled
January 19, 2024

The reason is obvious, home ownership rates are declining. Numbers that rent are growing, renters vote...

Retirement Dr
January 18, 2024

It might help if ASFA and Super Consumers produced standards that matched the needs of all Australians and not just the 1/3 that own their homes. This might help alert renters to the problems they are facing longer term. There is no doubt that a lack of social housing stock creates problems but with remote and hybrid working options maybe part of the solution lies in relocating to regional and peri-metropolitan areas while people are still working?

Aussie HIFIRE
January 18, 2024

According to article by Harry Chemay last year roughly 80% of those in the 60+ age bracket own their home, and although it isn't clear how many of those have a mortgage one would hope that having 30-40 years to pay off the mortgage almost all of them would be debt free. In which case it makes sense for ASFA etc to focus on the 80% of the retiree population that own their home, likely debt free, rather than the 20% who don't.

Retirement Dr
January 20, 2024

I was thinking of younger audiences than 60. Getting people in their 40's who are renting to think about what it would cost to keep renting and the implications for retirement - particularly if the standards (for renting) were published alongside aged pensions. We have enough CoreLogic data to make imperfect predictions about projected costs.

CC
January 18, 2024

Our governments really only seem to be interested in keeping housing prices higher and higher and looking after investors property portfolios ( including those of politicians....there's nothing as powerful as vested interest ! )

Disgruntled
January 19, 2024

No government wants to see house prices fall nor enact policy to make house prices fall.

Government support for house prices is quick if it even looks like house prices are going to fall.

Rhetoric talk on affordable housing is only about finding ways for people to be able to buy property that is otherwise unaffordable.

 

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