Media release

Housing decisions of older Australians

Many older Australians, especially the less wealthy, continue to save well into old age, increasing net wealth as they face increased health and aged care costs.

'When faced with lower incomes, older Australians are more likely to cut expenditure than draw down on their wealth, a surprising tale of precautionary saving,' explained Commissioner Karen Chester. Most notably this includes not accessing the wealth embedded in the family home.

'This is despite the fact that most older home owners could actually achieve a modest retirement living standard over the remainder of their lives by drawing on their home equity,' she said.

A Commission initiated survey and analysis of older Australians housing preferences shows older Australians have a strong preference to 'age in place' and access in-home aged care services if they need them according to a new flagship research report released by the Productivity Commission.

'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,' said Commissioner Karen Chester.

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

Reforms in aged care have supported these trends. 'But further reform is still needed to deliver better consumer choice by encouraging competition and innovation by residential aged care providers,' emphasised Commissioner Karen Chester.

Research also shows that an increasing proportion of older Australians are looking to move into homes that are more suitable to their needs. These may be either in the private market or in age specific accommodation such as retirement villages.

15 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 barrier to the supply of innovative and affordable housing options.

While most older Australians are home owners, older renters are a significant and vulnerable minority. They are more likely to be experiencing housing stress and have insecure tenure. The support available through social housing and Commonwealth Rent Assistance is inadequate.

'This highlights the imperative of further and comprehensive focus on retirement income policy and housing affordability for low income households, reviews which would have benefits for older Australians, as well as the broader community.