• July 3, 2020

Retirees holding onto spare rooms, even when they downsize

Roughly two million older Australians are considering moving homes when they retire.

But they won’t be giving up the spare bedroom.

It will be reserved for friends and family, or repurposed into a study or sewing room – extra space that will allow them to “age in place” and stay connected to their community.

Downsizing won’t be off the cards completely, though.

For while the phrase typically implies moving into a smaller home, a new report argues it’s more about finding a property that better suits one’s needs.

Entitled Effective Downsizing Options For Older Australians, the report finds that downsizing often means finding a home with a smaller garden or rooms that are easier to clean, rather than reducing the number of bedrooms or overall dwelling size.

Conducted for the Australian Housing and Urban Research Institute (AHURI) by researchers from Curtin University and Swinburne University of Technology, the report found 26 per cent of the 2462 Australians surveyed (aged 55 and over) had downsized and 29 per cent might consider doing so.

Of those who had downsized, two-thirds retained a spare bedroom as they deemed it essential.

“[Downsizing] was a way to achieve manageable internal and external spaces in dwellings; associated with a reduction in belongings; and, when undertaken by choice, usually accompanied by a financial benefit to the household,” the report said.

The same survey found “two million older Australians may be looking for alternative housing options to meet their longer-term housing aspirations”.

Reasons for downsizing

  • To achieve a particular lifestyle (27 per cent)
  • For financial outcomes (27 per cent)
  • Garden or property required too much maintenance (18 per cent)
  • Forced to do so (15 per cent).

Lead author Dr Amity James said the report showed governments were often pitted against older Australians, as they typically viewed downsizing as a way to improve affordability and allocate housing more efficiently.

Such a position assumes that there are appropriate and available homes into which downsizers can move – and that, where the number of bedrooms exceeds the number of permanent residents, dwellings are not being used to their full potential.

“This is at odds with the attitude of many older Australians who consider spare bedrooms necessary, using them as permanent guest rooms (58 per cent), studies (50 per cent), or dedicated rooms for children or grandchildren (31 per cent),” the report notes.

Note: Ancillary dwelling refers to a ‘granny flat’ – a self-contained dwelling located on the same lot of land as another house.

“The thing is, those spare bedrooms are really important. They’re critical for people to live out their lives in a way that they want to,” Dr James told The New Daily.

“It allows them to carry out hobbies … which, down the track, are a part of ageing well,” she said.

“So people are downsizing to smaller dwellings on the one hand, but they also need to be big enough for them to act out those non-shelter aspects.”

The report found that three-bedroom properties were the most popular but often difficult to find.

Of those surveyed, 40 per cent said they would consider moving if there was suitable housing in their preferred location.

Dr James said this was because most suburbs lacked diverse housing options.

“There’s the separate home, or there’s higher-density living. We need to fill in that gap in the middle,” Dr James said, referring to a lack of medium-density housing in certain suburbs.

The report suggested a handful of other policies to reduce barriers to downsizing.

It said the “financial barriers to downsizing associated with the treatment of the family home in the asset means test, along with upfront costs such as stamp duty, agent fees, etc, need to be assessed so that downsizing is a financially worthwhile undertaking”.

And it also suggested offering forward finance to asset-rich, income-poor Australians who wish to build a more appropriate home for retirement.

“There needs to be a way to forward finance a development without purchasers having to sell the primary home first and incur additional costs while building,” it said.

“Such a shift would require banks to restructure their loan assessment processes to allow lending based on a store of capital rather than a regular income.”

https://thenewdaily.com.au/finance/property/2020/02/12/retirees-spare-rooms-report/

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