Latest news with #emptyNesters
News.com.au
29-06-2025
- Business
- News.com.au
‘Forced to stay put': Financial adviser defends controversial Aussie Boomer housing trend
Baby Boomers living in oversized homes that could better serve young Aussie families are being 'forced' to stay put due to lack of incentives, experts have argued. Just 19 per cent of empty nesters in Australia moved into a smaller property after their children moved out, an Australian Seniors survey found in April, versus a whopping 69 per cent who had chosen to hold onto the family home. According to the survey, the least likely to move on were high net worth individuals – only 8 per cent of those worth over $200,000 had downsized. To the thousands of young Australians for whom property ownership seems like more and more of a pipe dream, such statistics probably read as selfish – especially given a Retirement Living Council (RLC) report this year found 59,576 homes could be unlocked if older generations were to downsize. Yet financial adviser Helen Baker told The Daily Mail on Sunday there was a fair reason why Boomers were hesitant to let go: to protect – and maximise – their pension entitlements. If a couple were to sell their $2 million Sydney home and purchase a $1 million property somewhere like Port Macquarie, the $1 million windfall could affect their age pension eligibility due to the federal government's assets test, Ms Baker explained. Though property is exempt from the test, leftover funds in cash or superannuation are counted. Older Australians are therefore delaying selling their homes – even if they no longer need the space – until they've run out of super and downsizing is their back-up to release more cash. According to social analyst and demographer Mark McCrindle, potential downsizers are perturbed by the financial burdens associated with selling and repurchasing – but the greatest barriers are the emotional and practical ones. 'This is the home they raised their children in – to give up that family home is to give up sentimentally and is a signal that the parenting stage has ended,' Mr McCrindle said, adding that 'many (parents) don't want to admit that'. A financial incentive from the federal government was needed to encourage older people to 'right-size' and move to more suitable accommodation. 'They don't want to be penalised when they downsize,' Mr McCrindle said. 'The support of others can get through the practical and emotional blockages, where the young people step in and say, 'Don't worry about the move and decisions, we will help'.' PropTrack senior economist Eleanor Creagh agreed that the decision to downsize 'isn't just financial' but 'very personal'. 'And the cost of stamp duty and a lack of suitable alternatives is a disincentive for a lot of older Australians – particularly given all the emotional and cultural factors at play,' Ms Creagh continued. Retirement Living Council executive director Daniel Gannon noted that many retirees were trapped in an 'asset-rich, income-poor' scenario. 'The financial disincentives to 'right-size', including harsh pension penalties, force them to stay put, despite the huge benefits of transitioning to retirement communities,' Mr Gannon said. 'Older Australians must be reassured that 'right sizing' is financially safe, not a decision that results in monetary loss.' 'Silver tsunami' can't solve crisis In the United States, analysis by leading real estate marketplace company Zillow last December found that a 'silver tsunami' – a wave of empty nesters selling their properties and downsizing – would do little to curb the nation's housing affordability crisis, given they often weren't located in areas where demand is highest. 'Even if we did see a 'silver tsunami', a look at the map tells me it wouldn't really move the needle in terms of solving our housing affordability crunch,' senior economist Orphe Divounguy said. 'These empty-nest households are concentrated in more affordable markets, where housing is already more accessible – not in the expensive coastal job centres where young workers are moving and where more homes are most desperately needed.' Data from Finder in Australia also found in November that cashed-up Baby Boomers looking to downsize were eyeing the same coastal hotspots as young buyers hoping to get on the property ladder. The research determined its findings by assigning each hotspot a 'Downsizers Index', calculated by multiplying the suburb population with the percentage of those aged 65 or older and the percentage of those who lived at another address a year ago and then ranked out of 100. Queensland proved to be Australia's hottest retirement destination – particularly the Gold Coast's Main Beach, where 37.1 per cent of all residents were aged over 65, 21 per cent of whom had been living at another address 12 months prior. It earned a Downsizers Index of 8 per cent – the highest in the nation. 'It will be interesting watching the property prices in these areas, because obviously when people are retiring they're downsizing from a house they've most of the time paid off the mortgage for, so they're moving with cash and they have a lot more flexibility in terms of adapting to price demands,' Finder's head of consumer research Graham Cooke explained.
Telegraph
17-06-2025
- Business
- Telegraph
Labour should give over-65s a stamp duty ‘freedom pass'
There's a growing problem in the housing market and it's hiding in plain sight. All over the country, large family homes are sitting half-empty. Children have long flown the nest, but their parents remain – more out of necessity than choice. It's not that older homeowners are unwilling to move on. Many would happily swap a high-maintenance house for a smart, well-located flat that suits their needs. But the reality of downsizing in this country is daunting. It's expensive, emotionally taxing, and, in many cases, downright impractical. Stamp duty is one of the biggest barriers. For someone in their 60s or 70s looking to downsize in London or the South East, it's not unusual for the tax bill alone to exceed £25,000. That's enough to stop even the most motivated mover in their tracks. So, here's a proposal for the Government: give homeowners over the age of 65 a one-time exemption from stamp duty, provided they're selling their primary residence and buying a smaller home. Think of it as a Freedom Pass for housing – a way to ease the burden of moving later in life and unlock thousands of family homes in the process. This isn't about forcing people out of their homes. It's about giving empty nesters the financial breathing room to make a decision that suits them – and benefits the wider market. When a couple in Primrose Hill or Clapham move out of a four-bedroom house, it creates space for a growing family to move up the ladder, and a first-time buyer to finally get on it. A single downsizer move can create a ripple effect of transactions. Imagine what this could free up for younger buyers. Almost four million older households, defined as aged 65 or more, under-occupy their homes, according to the English Housing Survey. A quarter have two spare bedrooms, while 40pc have three spare bedrooms and 21pc have four or more. Would cutting stamp duty encourage more people to move and free up some of this space? The closest way we can measure the potential impact of this policy change is to look at when the property tax was suspended during the pandemic. From July 2020 to July 2021, transactions increased by 19pc compared to the previous year. This is according to research from property firm CBRE, which concluded that the stamp duty holiday was key in stimulating this demand. This effect was more greatly pronounced in pricier properties. Average monthly sales of properties priced between £500,000 and £925,000 were 47pc higher than 2017-19, while transactions in the £925,000 to £1.5m price band were 40pc above normal levels. A stamp duty exemption would go a long way to helping free up space for upsizing families and first-time buyers. But we also need to talk about how hard it is for older homeowners to access finance. Some downsizers need to borrow a modest amount to top up their purchase, but if they're no longer in full-time employment, mortgage lenders offer little flexibility. Even those with significant equity and solid financial histories are often shut out of the market. We need more ways for people to access low-risk borrowing later in life. That might mean longer-term mortgages, more flexible affordability criteria or government-backed guarantees. Without this, many empty nesters find themselves asset-rich but trapped – unable to move because the financial system has written them off. Then there's the problem of stock. Downsizing doesn't mean settling for second best. These are buyers who want to stay in the neighbourhoods they love, close to friends, services and familiar routines. Too many new developments aimed at this demographic miss the mark, offering uninspiring homes in peripheral locations. If you've lived for 30 years in Dulwich, why would you move to a boxy flat on the edge of nowhere? Developers need to do better. That means building thoughtful, design-led homes with storage, light, and enough space for the grandchildren to stay. It means walkable neighbourhoods with cafés, shops and transport on the doorstep. And it means understanding that 'downsizing' isn't about giving up – it's about choosing a home that fits the next chapter. If we're serious about unblocking the housing market, we need to start with those who already have homes and might be open to moving, if only the system didn't make it so hard. A one-time stamp duty exemption at 65. Smarter lending for older borrowers. Better, more appealing homes in the right locations. These aren't radical ideas – they're common sense. And if we get them right, we can get the whole market moving again. Jonathan Brandling-Harris is co-founder of House Collective, an estate agency.
