Invest
Mortgage burden will push retirees to downsize: Report
The proportion of households entering retirement while saddled with debt has more than doubled since 1996, and it could prompt retirees to downsize, a new report has found.
Mortgage burden will push retirees to downsize: Report
The proportion of households entering retirement while saddled with debt has more than doubled since 1996, and it could prompt retirees to downsize, a new report has found.

According to BIS Oxford Economics' latest report, there hasn’t been a significant increase in the number of retirees downsizing since 2011.
However, the “glacial” increase in downsizing retirees could pick up pace as mortgage burdens begin to sting, the Emerging Trends in Residential Market Demand report hypothesised.
The percentage of Australians between 50 and 64 with a mortgage has increased from 20 per cent in 1996 to 42 per cent in 2016, with a respective fall in the equity they hold in their home.
BIS Oxford Economics residential property senior manager, Angie Zigomanis said this will push retirees to consider downsizing and in turn raise demand for smaller unit-style living.

“Households will increasingly still have a mortgage once the occupants reach retirement age,” he said.
“Unless the occupants elect to remain in the labour force, there will be an increasing number who are likely to sell out of their dwelling upon retirement to move elsewhere or into a lower priced smaller dwelling to reduce their debt.”
Naturally, retirees will be looking to downsize without moving outside their established area, which will also push up demand for units and townhouses and place them in direct competition with younger buyers; those between 20 and 34 with young families.
“If Generation Y follows the trend of the previous generation and eschews renting and favour larger dwellings as they enter the family-forming age of life, then this will support a decade-long boom in demand for new houses and land in the new housing estates on the outskirts of Australia’s major cities and affordable major regional centres,” said Mr Zigomanis.
“Pressure is also likely to be maintained on house prices in established areas, as competition remains strong for Generation Y families looking to remain in the established areas where they have already been living and renting in smaller apartments.”
Current retirees aren’t downsizing to save money
As per the BIS Oxford Economics findings, State Street Global’s latest retirement survey highlighted the disparity between assumptions and realities of downsizing.
It found that 30 per cent of the Australian working population is planning on using downsizing or equity release instruments to make up savings shortfalls in retirement. However, only 3 per cent of actual retirees have gone down that path.
“In reality, retirees are not tapping into their home equity at the rate that younger generations expect. For one thing, smaller is not necessarily cheaper. Moving to a smaller home near an urban center may not actually reduce costs given increased real estate and cost of living expenses,” the report’s authors noted.

Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more

Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more

Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more

Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more

Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more

Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more

Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more

Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more

Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more

Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more

Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more

Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more

Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more

Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more

Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more

Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more