It’s not a house, it’s a home

Anyone who has seen the 1999 movie – was it that long ago? – ‘The Castle’ will be familiar with Darryl Kerrigan and his attitude towards his home – his castle. It was the quintessential house sitting on a quarter acre block in the suburbs, albeit under to flight path to Melbourne’s Tullamarine Airport.

I recently read a headline in a major newspaper that read:

“Scott Morrison urges retirees to ‘free up larger homes for younger families’”

Unless we have been hiding under a rock for the past couple of years, we will all be aware of what has been described as Australia’s housing crisis.

Property prices, particularly in Sydney and Melbourne have been soaring, and finding a suitable property to rent at an affordable price is becoming more difficult. There certainly is a crisis for many looking to get reasonable accommodation at an affordable price for their families.

But is it as simple as expecting retirees, or in fact any older Australian’s, working or not, to sell up and make way for younger families?

The 2016 Census reveals some interesting facts about housing.

Of the almost 10 million dwellings in Australia, something like 8.3 million were occupied on ‘Census night’. Separate houses, as opposed to apartments, flats, townhouses and the like, accounted for 72% of all dwellings.

But one of the more interesting statistics was the number of people living in each house. While 69% of private dwellings were occupied by one family and 2% by multiple families, 25% of dwellings comprised of single person households. That is something like 2,000,000 private dwellings have a sole occupant.

The average age of a female living alone was 64, and for a man, it was 54.

Incidentally, the average household comprises of 2.6 occupants.

While one could argue that it might be a little selfish for a sole occupant to be living in a four, five, or even six bedroom house in the suburbs, should they be ‘encouraged’ to make way for families?

This is a very emotive question and if we reflect back on ‘The Castle’, we know that a person’s home is their castle!

While there are some logical reasons to suggest freeing up larger properties for younger families, there are other issues that also need to be considered in order to balance the debate.

When reflecting on this topic, some of the things that crossed my mind include:

  1. A person’s principal place of residence is excluded from means testing for age pension purposes. Selling the family home and trading down, with the view of freeing up equity may result in the loss of all, or a part of the homeowner’s age pension entitlements. We have all heard the supposed stories on pensioners living in million dollar waterfront properties on the Gold Coast!
  2. Preserving accumulated wealth (i.e. home equity) in an asset that is free from capital gains tax and Centrelink assets and income testing until additional funds are required later in life to provide extra income or to help with the costs of aged care.
  3. Often people have lived in their family home for many years. They are familiar with their local area, its medical facilities, shopping centres, and public transport. They may also have strong connections with family, friends and their community. Not everyone is looking for a sea-change or a tree-change.
  4. There may be a desire to retain a property for sentimental reasons or for reasons associated with family connection. Perhaps the intention is for the property to pass to younger family members when the current occupants move on.
  5. Large family homes in established areas are often close to the city and other facilities. If the intention is to free up housing for younger families, will they have the money to be able to afford to buy these established properties any way. Or is the intention to redevelop prime housing sites into higher density living and potentially destroy the fabric of contemporary social history of the past?

While I can understand the suggestion that older folk occupying large homes might be preventing younger families from entering the property market, somehow the answer to the problem is not as simple as suggesting these folk give up their homes in an attempt to resolve what I believe is a much bigger problem.

What do you think?  Please share your thoughts.

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