The Council of the Ageing’s (COTA) chief executive, Ian Yates, argued this week that Australia’s equity release market will need to shift up a gear to meet the demands of future Australia.
Speaking at the ASIC 2018 Annual Forum in Sydney, he said, “[The] thing that I think we need going into the future of Australia is a much more agile and creative and efficient equity release market.
“We have so much wealth tied up in the house that as people get older they would actually like to be able to tap into. The Productivity Commission recommended that a few years ago [but] the government didn't do anything about it.”
Continuing, Mr Yates said Australia is without a “decent” equity release market and in fact has a number of disincentives for those considering the move.
Retirement psychology expert Dr Joanne Earl from Macquarie University added that, by and large, most people don’t regret the decision to downsize.
She said most people chose to move to a smaller property to lessen the workload associated with large gardens.
However, Dr Earl warned that those who did regret the decision often felt the pain of leaving behind an established network.
“The main source of regret for people was leaving behind established networks, and not just family and friends like you might think, but the butcher, the baker, the candlestick maker, all the people that provided them with services they already trusted, that knew their car, knew their house, knew their power grid,” she said.
“All of these things were people that they valued that they didn’t realise they had connections with.”
Dr Earl said one of the most upsetting testimonials came from someone who had downsized, hoping to address psychological and emotional issues tied up with their home.
However, this downsizer told the researcher, “I was sad and lonely before, I’m sad and lonely now.”
Bearing this in mind, Dr Earl said it’s important prospective downsizers don’t consider the move a silver bullet for larger emotional issues.