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NewsTo downsize, or not to downsize?
To downsize, or not to downsize?

To downsize, or not to downsize?

Tags: FiftyUp Club
Last updated by Chris Zinn on

Are those of us aged over 50 really hogging all the detached houses in suburbs close to the amenities of the CBD, at the direct expense of younger families who can’t find homes to  buy?

There’s been a fierce blame game all week after the Australian Population Research Institute claimed "empty nesters" are forcing kids to grow up without backyards by refusing to downsize and move out.

As an issue it has everything; intergenerational warfare (with baby boomers somehow at fault), the inflated and unaffordable property market, and a big slab of presumed guilt for not moving on.

Sure, the census shows up to 60% of those desirable freestanding homes in Sydney’s and Melbourne’s inner and middle suburbs are occupied by those aged over 50. And why not?

 They have grown older there and are part of the community. It’s close to health facilities and as Australian Seniors’ Michael O’Neill rightly pointed out, these were often much more humble areas in the past.

In addition the recent changes to pension eligibility outlined in the last Budget mean that if you downsize and liberate the capital from the family home, you stand to lose some or all of the pension.

Should over-50s downsize from the family home so younger families can have more space, as media reports suggested this week?

Click here to vote

The data suggests almost all of those lucky enough to be living in such places will stay there until they are at least 75 - and even then, they will usually choose to buy another freestanding home.

The boffins behind the report say there’s a shortfall of tens of thousands of detached houses and it will get worse over time.

 So what’s to be done, and who ends up paying given that the planners or the market seem to have got it so wrong?

Inevitably there have been controversial suggestions that the family home should be included in the pension’s assets test to encourage downsizing.

Another bright idea, which arguably would hit also hit older Australians harder, would be to replace the stamp duty on sales with an annual property tax levied for just living in your home.

None of the pundits seem to mention how many grandparents in some of these homes and gardens provide childcare for 837,000 kids a week at some cost to themselves (see our October 1 blog on this issue).

Inevitably there’s no easy answer but the first response should not be to sheet home the blame and the cost for so-called reforms to those who have done nothing else but buy and love their homes.

As you’ll see from some member comments below, you seem to feel much the same. Also do answer our snap poll on the issue - ">Should over-50s downsize from the family home so younger families can have more space, as media reports suggested this week?"

Click here to vote

Originally posted on .

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Carrie
Carrie from NSW commented:

Our first home was in Caboolture and we worked in the centre of Brisbane . The problem with the younger generation is they want to live in the city, have other people look after their child and have us the tax payers pay for it ! Buy a small house in the outer suburbs with furniture from vinnies like we had to. You cannot have it all when you are in young . I'm sick of hearing how the housing market has forced young people out of the market . 

sinikka
sinikka from NSW commented:

Elderly people have paid taxes and they should be able to do what they want without having a fear of loosing pension many would downside if there was no penalties. We are self funded retirees live on rural acreage/property have huge concrete slab behind the machinery shed, we wanted to build a granny flat there could cheap/low cost accommodation to some pensioner as the area needs more rental accommodation this was rejected by counsel, we can build granny flat which is attached to house but this is impossible how the house was built by previous owner on undulated land. 

Rodney
Rodney from QLD commented:

Waa Waa Waa, all I hear is whinging Gen X and Gen Y's. What's the matter with these people? What a pack of whingers - Waa Waa, we can't get a good house, Waa Waa we want something better, Waa Waa. You know what, get over yourselves. You sound like a bunch of self-entitled, self-centred, self-absorbed brats. Why don't you do what we did, work two (and sometimes three jobs), stop spending money on trivialities - you don't need the latest 'I' something, try economising and save money instead of blowing it all on nails, and hair and cars and sound systems and holidays and generally trying to keep up with and posture like worthless TV 'Celebrities'. We over 50's won't be moving out of the house we all worked so hard and for so long to finally get. So stop whining and work for a change; you will be amazed at how easily things come to you when you work instead of whinge and put in effort instead of pout! And furthermore, the over 50's, who didn't get access to all the family benefits available these days, had to live through the burden of interest rates hitting 18% - with dependent families; so don't think that over 50's don't know sacrifice - our generation is probably the worst treated generation in the history of this country. Like I said get over yourselves whingers! 

Liz
Liz from ACT commented:

Not likely. these boffins speak with forked tongues. The shortfall is lining their own coffers. Detached housing, NEVER as demolished homes will be replaced with 15- 30 storey high rise family accommodation. How about these Einsteins create a backyard of community playgrounds and vegetable gardens on the roof tops (plenty of space up there), so that the deprived younger generation only have to press a lift button to access their backyard with great views to boot. 

Francine
Francine from NSW commented:

I do not see how it will change the fact that children are growing up without backyards, the younger generation will pull the house they buy down and put a very large house that will be right on the boundry lines like they are doing in my area, so nothing achieved but a very large house that is good for their moral. 

Patricia
Patricia from NSW commented:

Hi my name is Trish.Two years ago now we downsized.We lived in a four bedroom,three bathroom,four garages etc.We lived in an area where we were surrounded by trees.As beautiful as it was it was just work.My husband will be 70 next year and I am a bit younger.We downsized to a small house flat block of land,not a tree in sight and we love it.We bought the block which we paid to much for and we are renovating the house ourselves.My husband is a tradie and gladly has still go plenty of go in him.No health problems.He loves his workshop where he is most of the time.If we went into a retirement village he wouldn,t be able to do that.The young ones of today want everything straight away,they go into to much debt.In our day we paid of our house,stayed in it forever,had second hand furniture,an old car etc.Today the young ones have to have it all to keep up with the Jonees.My only regret is we left it a bit to long to downsize.Othe than that we are very happy.. 

sieg
sieg from NSW commented:

Thanks for being on the ball Gertraud, all areas referred to were to have been expressed as squares. I blame my subconscious mind; had been working on some plans which were expressed in Sq m's. 

Someone
Someone from VIC commented:

Yes I believe the oldies should downsize after all they have served their purpose in life they have made the country what it is today. I know it is terrible that the younger generation will grow up without a backyard then again most of the kids I know would not get off their bums to do anything and would be happier living in the make believe world of dungeon and dragons, Nintendo, PS3/4, war of the empires and fast and furious etc. There are a lot of us oldies that never had a house of their own until they worked their butts off while they raised their kids scrimped and saved, whilst never pampering their kids, but still ended up with a place to call their own. My opinion is let them work and struggle like we did to get what they want then tell them they should downsize all they have worked for and then give it away to free up properties so their precious, precocious little ones can have a backyard that they are not really interested in and probably wouldn’t use. I don’t think so 

MARCELLE
MARCELLE from NSW commented:

I am so furious with all this we are turning into a dictatorial country just like communist and Russia. What is happening here? I can suggest one thing leaving it to the individual retirees to decide whether they want to downsize or not. If some decide to downsize then the government must make it enticing for them to consider the change such as: 1. The difference between the new home and the old home is not subject to tax and not counted as part of total assets for part pensioner payments. 2. Exemption from stamp duty on the new home. 3. a generous lump sum to cover removal costs and other expenses. Only then you will get some not all part pension retirees interested in the move otherwise why should they move ? Marcelle Daniel NSW 

Gertraud
Gertraud from ACT replied to MARCELLE:

Any money left over from selling your home and buying a new one is not subject to tax, but interest earned on this amount is taxable. As to your wish that it isn't counted as an asset to make it "enticing", keep wishing! The way government will make it "enticing" for older people to sell their home will be by counting the family home as an asset. And why shouldn't it be? Why should someone be able to draw a pension while living in a home worth a million dollars or more? If you look at the asset test for people with and without their own home, you will find that the value set for the home is extremely low at $146,500. Yes, I know people have worked hard to pay off their homes, nobody is disputing this. But if a person owns sufficient assets to fund their retirement, surely, there is an obligation to do so? At least this has always been my goal, throughout all the years I raised my four kids as a single parent. There was a lot of hardship, but I am proud to say that I do not receive a single cent of the age pension! 

Robert
Robert from NSW replied to Gertraud:

Spot on. Everyone should be required to pay for themselves and should be good to their last cent during their life or from their estate. Everyone wants the pension despite having the capacity to pay for themselves. They want to live of someone else's money. 

Allan
Allan from QLD replied to Robert:

Robert and Gertraud, congratulations on being self sufficient. But not EVERYONE has been that fortunate. Most baby boomers paid taxes and worked hard for what they have. But, not all these baby boomers have access to superannuation/ large bank accounts etc. So, if a pittance of a pension is paid to these retirees, grudgingly by Centrelink, in recognition of there contribution to this country then so be it. Remember there are residents of this country that are on the dole and never worked a day in their lives and this is a fact. So why should they have this priveledge and not somebody that has contributed to this country's economy and work force. 

Isabella
Isabella from NSW replied to Allan:

Allen I agreed with you whole heartedly.... i have a member of my family on the dole and his partner is a DRUNK who is on a disability pension and she got that because she opens her druken mouth up and someone shuts it with their fist, she falls off decking and is a repulsive individual.... and at the age of 55 is on a pension all because this stupid government gave it to her and she came from NZ. OMG and I will have to be self funded. 

Kenneth
Kenneth from QLD commented:

We have worked hard (some still working) and should have the choice of where we wish to live and not be made to feel guilty of this choice. Over the years we have saved hard and paid off our mortgages and have no credit card bills overhanging our heads. The younger generation could not afford our houses; nearly everyone has to have the latest model car and all the up to date electronical gear that overtake our houses today. 

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