Aussie seniors the forgotten victims of housing affordability crisis

Not all Baby Boomers are reaping the rewards of rocketing property prices. In fact, plenty are doing it very tough. Are you one of them?

The Baby Boomers who’re accidental millionaires thanks to the soaring value of their family home are regulars in the news.

But older Aussies are also the group most at risk from the slump in housing affordability in many cities, experts tell Starts at 60.

Professor Peter Phibbs, a housing specialist at the University of Sydney, says the stratospheric cost of buying housing has helped push up rental costs, leaving many renters on the Age Pension “doing it tough” because they have no way of increasing their income to cover rising costs.

“They’re paying the rent and utilities and whatever they have left over, they live on, and if they get an unexpected bill, they just eat less,” he says. “There’s no leeway.”

The stark warnings came as Sydney was ranked this week as the second most-unaffordable housing market in the world, coming in behind only Hong Kong in a Demographia survey – news that sparked political debate over whether Australia had a housing affordability crisis.

Although the Demographia survey looks at housing purchase prices, other surveys show that, despite rents across the capital cities falling in 2016, the cost of renting is still unaffordable for many people.

“Rents are going up faster than the pension,” Phibbs says. “They just haven’t got the financial resources to pay the rent people are demanding in urban areas.”

Fiona York, co-manager of the Melbourne-based Housing for the Aged Action Group (HAAG), says research shows Age Pensioners in the private rental market spend about 70 percent of their pension payments on rent.

“There’s a myth going round that all older people are homeowners,” she says, noting that between the 2006 and 2011 censuses, there was in fact a 44 percent jump in the number of renters aged over 55.

York’s group works on finding affordable housing for seniors. She says the Commonwealth Rent Assistance payment made to pensioners isn’t high enough to offer much assistance with Australia’s high rents, and that many people who seek help from her have been forced from their homes by rent increases.

About 60 percent of HAAG’s clients are women.

“A lifetime of lower wages means they’ve never got into home ownership and they’ve managed to survive in the private rental market while they’re working but once they’re not, they get forced out,” she says.

The rocketing cost of city land also means that older types of affordable housing, such as the cluster homes for pensioners that were often run by non-profit organisations, are being sold to developers who replace them with pricier apartment buildings, York explains.

Phibbs warns that the issue of older renters doing it tough isn’t going to go away.

“There’s going to be increasing numbers of older renters,” he says, as sky-high house prices lock more and more of today’s workers out of the property market.

Research released by Victoria’s Swinburne University of Technology in October shows there are 425,000 over-50s renters in Australia, with the number expected to rise to 600,000 by 2030 and to 830,000 by 2050, and that those people tend to have little personal wealth.

That growing number poses a big problem for future governments, lead researcher Dr Andrea Sharam cautions.

“This number of impoverished older people equates to a huge increase in demand for housing assistance,” she says.

Has Australia’s property price boom been a boon or a pain for you? Do you see housing affordability as an issue that impacts Baby Boomers just as much as it does the Millennials who’re locked out of the housing market? What advice do you have for people struggling to pay their rent?

  1. Maria Meiklem  

    I am lucky so far that we sold our family home and bought into a retirement village paid more than half of what we got for our home have to pay a monthly levy which goes up every year which at the moment is over $5,000 a year pay the establishment three per cent from when we moved in for ten years so at the end of time for my hubby and I won’t leave much to our too kids and the Goverment give us no help whatsoever ever and we worked so hard to pay our home off we’re never lucky to have any property or money left to us by family is this a fair way to treat Aussie Age Pensioners I don’t think so why does the Goverment build small affordable units for people over sixty so they can at least have an affordable roof over their heads as they age bearing in mind with the ageing proses come health issues also not everyone has been able to afford a home of their own so come on Australian Goverment help us older citizens who have loved cherished and worked all out life to retire at least with a roof over ourheads

  2. john  

    I sold my house in Melbourne moved to Corowa paid cash for a better house and have a fair amount of cash on hand I am 64 retired self funded till the pension kicks in better weather cheaper everything and live in paradise why do pensioners live in big cities move to the country bitter life style and if you are a renter much cheaper rent don’t see an issue just people who cant see outside the box

    • Brenda  

      I agree. We moved further out after my husband retired, happily, to be near our children and our only regret is that we weren’t in a position to do it sooner. We now have a fairly new home, live 5 minutes away from shops, medical centre and transport and though we are in a growth area there’s still plenty of open spaces to enjoy.

  3. Hi l know as l tried to rent a place. I lost my home just over a year ago as l had few medical problems which mind you were the fault of doctors stuff ups. So l couldn’t and still can’t work. I had a home in Brissy and as most people know the market is nothing like in Sydney or Melbourne. I only got for my place what l was offered 10years ago. So not been in able to work in out of hospital etc l lived off my home until l sold it. Couldn’t buy anything much or even rent. So life was and still is pretty stuff. I hunted around drove up the coast down the coast. I then found a run down one bedroom cabin in a park on the tweed. I brought it and with what little money l had did it up the best l could. Now the park fees are going up close to the $200 a week. It really doesn’t leave you a lot. Not every one is as lucky to have made a gain out of there property, and if you live in Qld good luck.

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