Planning and design laws, not financial issues, the main barriers to downsizing

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Encouraging elderly homeowners to downsize has been touted as one way to address housing affordability and supply issues, but it is likely to take more than just financial incentives to encourage people to move from their family home.

Last month, both the Property Council of Australia (PCA) and Real Estate Institute of New South Wales (REINSW) called for changes to be made to both the pension means test and stamp duty to make the idea of selling the family home more attractive to the elderly.

But while those groups believe reducing financial barriers could result in more and larger family homes coming on to the market, others have suggested there are more pressing needs to be addressed if downsizing is to become a popular choice.

A report from the National Seniors Productive Ageing Centre (NSPAC) suggests elderly homeowners are currently reluctant to downsize due to a lack of appropriate housing stock.

“It is clear that there is a gulf between what many seniors want and what is available in the present marketplace. This dearth of appealing housing stock seems to stem, in some cases, from a lack of innovation and flexibility in terms of development, planning and design,” the NSPAC report said.

“State and local government could do more to promote senior-friendly housing products in planning and ageing strategies by encouraging more areas of higher density and age-friendly accommodation around transport hubs and town centres.”

The NSPAC’s calls for changes to planning and design laws are backed by the Federal Government’s Productivity Commission, who made similar claims in a report of their own this week.

“Fifteen per cent of older Australians expect to downsize to a more suitable dwelling or age-specific housing. State and local planning systems remain the most significant barriers to the supply of innovative and affordable housing options,” the commission’s report said.

In response to the Productivity Commission’s report, PCA retirement executive director Mary Wood said governments should look to changes that will increase the availability of stock in retirement villages.

“Retirement villages are an increasingly popular and affordable choice but there is not enough supply to meet demand because of outdated planning systems,” Wood said.

But development lobby group Urban Taskforce believes the focus should be on integrating appropriate stock for the elderly into residential areas.

“With advances in health care many seniors remain active for decades after retirement and they prefer to maintain an active lifestyle before moving to aged care facilities,” Urban Taskforce chief executive officer Chris Johnson said.

“An ideal option for these people is to downsize from a large suburban house to a nearby apartment close to amenities,” Johnson said.

That suggestion may be the more effective option, with the Productivity Commission’s report finding the popularity of residential ages care services is falling.

“Since home care is considerably cheaper than residential aged care, it is not only what most people want but also potentially more fiscally sustainable for Government,” Productivity Commission commissioner Karen Chester said.

“We are seeing that residential aged care is increasingly becoming an end-of-life option, with the average age of admission increasing,” Chester said.

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  • Paul says on 03/12/2015 06:52:33 AM

    Re Mary Wood's comments about increasing retirement villages numbers. There are a couple of problems.
    1) Purchasers will need to have cash reserves when entering as monthly fees eat too much into retirement savings/pension income.
    2) Maintenance fees often go up at the same time as pension increases
    3) Deferred management fees make a purchase decision unsuitable on a financial basis
    4) The Productivity Commission supports Equity Release from the occupied home, but retirement villages are leasehold tiles and cannot be borrowed against


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