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Market conditions are getting worse for older Australians, especially those on lower incomes — by 2031, an estimated 440,000 older households will be unable to find or afford suitable housing, according to a study by AHURI.

AHURI lead researcher Dr Debbie Faulkner said older Australians want to stay in an affordable home and to live in a safe and secure neighbourhood.

“The households we surveyed had clear preferences for a shared equity home ownership model, a cooperative housing model and a transportable housing model,” she said.

“The strong preference for the shared equity model reflects the expectation that it is “normal” to own one’s home in Australia.

The AHURI study explored other alternative housing models for the demographic, including cohousing, integrated mixed-use developments, modular-style manufactured housing utilising vacant land, and low-rise development.

“The subdued response to the other options we presented indicates people’s long entrenched aspirations and a lack of familiarity older people have with “alternative” housing options,” Dr Faulkner said.

Small mortgage could help

Even though many low-income older households can’t afford any form of mortgage, some are still paying large proportions of their income on rent.

Dr Faulkner said shared equity mortgages and land lease mortgages are two options to consider.

Shared equity mortgages might still be a difficult proposition for low-income households.

“It is most likely they will rely on government equity partners that will need to be patient before they recoup their investments on the future sale or transfer of the property,” Dr Faulkner said.

Meanwhile, a land lease arrangement would help by allowing the household to own the dwelling but not the land, which will be leased from another person or a corporation.

With a land lease arrangement, households will be eligible for Commonwealth Rent assistance (CRA), which can improve housing affordability.

“Not all buyers have sufficient cash to purchase a land lease home, but some could support a small mortgage as a way of obtaining security of tenure and preserving their capital,” Dr Faulkner said.

“However, banks rarely lend for this type of product — this refusal to provide mortgages was criticised as being inconsistent, as banks do lend for other depreciating assets such as cars.”

Regional is the way to go

The AHURI study mapped the projected increases and declines in population of older low-income households across Australia. It found that the largest projected increases are likely to be in peri-urban and outer-suburban regions.

In New South Wales, increases are expected in Orange North (117.5%), Muswellbrook (75.1%) and Maitland West (126.2%).

Across Victoria, the regional centres of Horsham (48%), Shepparton (47%), Ballarat North (72.1%) and Wodonga (93%) are likely to witness a surge in older households.

For South Australia, Victor Harbor (68%), Port Lincoln (40%) and Murray Bridge (61.4%) are likely to see population increases of older, low-income renters.

Western Australia is likely to see similar increases in Albany (54.6%) and Busselton (107.3%).

Meanwhile, Sorell–Richmond in Tasmania is expecting a 97.1 per cent increase in older, low-income renters.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
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  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
  • Find out your loan eligibility in 2 minutes or less
  • Complete your application in less than 20 minutes
  • Low fees and fast approval times
5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

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