The report, released by the Swinburne Institute for Social Research, examined the wealth of people aged between 40-64 years, with a focus on recent retirees.
“Housing is a probably the key way of generating wealth, but people who are unable to purchase or fall out of home ownership will find that they don’t have as much wealth in retirement,” research author Dr. Andrea Sharam said.
The report further indicated that people who had not purchased property by midlife were unlikely to purchase thereafter.
“There are currently 425,000 people in lone person or couple households over 50 renting in Australia with this number expected to rise to 600,000 by 2030 and again to 830,000 by 2050. This number of impoverished older people equates to a huge increase in demand for housing assistance,” Sharam said.
Moreover, the growing population of retired renters will place added pressure on the pension system and even greater pressure on the rental market, which isn’t designed to cater to older people with lower incomes, said Adrian Pisarski, executive officer of National Shelter.
For those in the older age brackets (between 65 to 69 years of age), the wealthiest were those who owned their own homes and other properties. However, the net wealth of such individuals dropped between 2003 and 2013, most likely because they’d taken on more debt related to the leveraging of their other properties.
The report recommended a number of reforms, such as substantial community investment in social housing and new affordable housing tenures aimed at midlife households that may not be eligible for social housing, but at the same time cannot afford full market house prices.“Social housing eligibility should be widened to order to cater for a broader range of incomes,” Sharam said. This would help prevent the loss of wealth associated with private renting and minimise the danger of retirees exhausting all of their resources before the end of life.
Collections: Mortgage News