OLDER lower income households are increasingly being forced to remain in the private rental market, with an estimated 440,000 older households to be unable to find or afford suitable housing by 2031.
According to a new report by AHURI, housing options for older Australians on lower incomes are narrowing, with homeownership rates declining, more people holding mortgage debt into retirement and access to social housing plummeting.
The major barriers facing older lower income households include lower levels of education, a lower likelihood of employment and a greater likelihood of living alone and needing housing modifications to address health issues.
In order to help Australians in or entering retirement have access to secure and affordable housing, different models of home ownership need to be made available, such as shared equity and land leases.
In a land lease arrangement, the household would own their dwelling but not the land, which would be leased from another person or corporation.
Not owning the land component would make households still eligible for some level of Commonwealth Rent Assistance, which would improve 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,” said Debbie Faulkner from the University of South Australia.
“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.”
Lend lease models are increasing interest in regional centres, which can provide land parcels required for low-density development models and offer options for more risk averse developers and investors who are willing to take on lower returns.
“It’s important though, that regional housing options are accompanied by investment in the services older people need to age well, such as in health and community connection,” added Faulkner.
Establishing seniors housing in smaller cities and towns could also bring potential benefits to the areas including rate revenue to local councils and increased spending in the wider community.
“Building higher density housing, including one bedroom or studio units, can also suit the older age group, as it provides potential affordability, lower maintenance and increased opportunity for social connections and support,” said Faulkner.
“Co-living was seen as an option for some older people. While older householders usually had a strong preference for larger, fully self-contained dwellings and private open space, many of the pre-retirement informants indicated an openness to communal living arrangements, ranging from having shared laundries to co-living. These findings suggest a welcome generational shift in thinking is occurring.”
