There’s no place like home
Older Australians are falling off the housing ladder and face spending their retirement as renters, with the situation expected to worsen for coming generations, the New Daily reports, citing the Grattan Institute’s recently launched Grattan Retirement Incomes Model.
“Falling home ownership rates among younger generations means many more retirees in future won’t own their homes,” GRIM states.
Older Australians are one of the fastest-growing groups of renters in Australia, and in 2015-16 there were 102,600 lower-income households aged 65 or over in the private rental market, according to ABS estimates.
While home ownership rates are falling fastest among the young and the poor, we’re also seeing a “tsunami of falling home ownership” among those in their late 40s to early 60s, according to the Grattan Institute senior policy adviser Brendan Coates.
“Our current retirement system is predicated on the assumption that most people will own their own homes. That assumption is running headlong into the falling rates of home ownership,” Mr Coates said.
Older women are most vulnerable to falling out of home ownership and into the cut-throat rental market, or homelessness, experts say.
A recent survey of more than 4000 Australian workers conducted by the Australian Services Union found that the median superannuation balance for women immediately before retirement was less than $80,000, which is estimated to fund less than three years of retirement.
Men fared slightly better, with an average superannuation balance estimated to fund five and a half years of retirement.
There are a number of “key life triggers” such as job loss, divorce, and illness that cause older Australians to “tumble out of home ownership”, according to Curtin University housing and population ageing expert Rachel Ong.
Unlike younger people who are better able to bounce back from “adverse life events”, older people “find it very difficult to make their way back into home ownership”, Professor Ong said.
“We need to adapt our retirement income system to acknowledge the reality of falling home ownership,” Mr Coates said.
“Even if politicians do everything in their power, falling home ownership is baked in, so we need to make a retirement income system that treats people more fairly whether they’re a home owner or a renter.”
Commonwealth Rent Assistance will need to be boosted by up to 30 per cent in order to ensure retirees who rent have an “adequate or comfortable retirement”, Mr Coates said.
Changing tenancy laws to improve renters’ rights is also key to ensuring Australians of all ages can afford a home.
Landlords can currently evict renters for no specified reason, creating a situation where renters may have to bear the brunt of moving costs at short notice.
“Renters need to make their house a home,” Mr Coates said.
However, for pensioners and many others on fixed incomes “the private rental market is just inappropriate”, Mr Patterson-Ross said.
Instead, such demographics require “market-proof housing”, such as social and public housing “to ensure people can be protected from the market where they’re not able to compete”.
Next generation sharehousing
Women get a raw deal during their working lives and come retirement time, they confront the frightening reality that their money will run out before they do, writes RUSSELL HUNTER
All available data and research point to a gender gap that shows no signs of closing. Women are in general paid less than their male counterparts for equal work. They frequently have interrupted careers due to family commitments.
And they live longer.
So, on retirement, women – in particular single women – tend to have less in their super accounts.
Housing, then, becomes critical.
Women who need to rent are extremely vulnerable. And that’s where at least one not-for-profit organisation has identified a role.
With State Government support Better Together operates, for now, mainly on the Sunshine Coast and provides a service that matches women who can team up to rent shared accommodation.
As Better Together’s Gail Middleton explains, the best a retiree can hope for on the pension is $500 a week. An average two-bedroom home will cost $300 to $320 a week in rent. That leaves about $180 for bills and food.
The stories of women staying in bed because they can’t afford the power bills are not myths.
But the numbers – daunting as they are – don’t tell the whole story.
“Women living alone on the pension risk being isolated from their communities,” says Ms Middleton. “They stay home because they can’t afford to go out which give little or no opportunity for interaction.
“They can’t accept invitations because they can’t afford to take a bottle of wine with them, for example.”
Having spent half a lifetime in the quest for affordable housing, Ms Middleton says throwing more money at the issue isn’t necessarily the only answer.
“We’re always looking for solutions,” she says.
And one of these has been shared accommodation.
“People have talked about the potential of shared housing for a long time. But now we are trying to match people – and this can be quite risky. For instance, the women who we’ve discussed this with neither need nor want advisers.”
At the same time, the need for such a service very obviously exists. People on fixed incomes can and do find themselves in difficult situations in regard to housing.
So Better Together seeks to match women who not only may benefit from pooling their resources but who are likely to be compatible.
“The participants need to be involved in the process,” says Ms Middleton. “They need to be involved in all facets of the organisation.”
The Better Together program looks mainly at 2 and 3 bedroom homes. That’s primarily because bigger homes tend to cost considerably higher rents putting them out of reach of even pooled incomes.
“Two or maybe three people each with an income of $300 a week can do quite well,” she says. “But it’s really up to the participants. We help them draw up a co-tenancy agreement containing, among other things, a grievance procedure.”
In that way all tenants know their rights and responsibilities.
“This program is for average everyday women,” says Ms Middleton. “They’re not welfare dependent and they’re quite capable of running their own lives.”
The Better Together program allows potential clients to browse each other other’s profiles on its website while also carrying out extensive background checks to ensure that only genuine inquiries get past the first stage.
And the rate of inquiry shows that women in their golden years can see the program’s benefits.
WOMEN ARE WORKING BETTER TOGETHER
Better Together Housing (BTH) has been created by two leading charities on the Sunshine Coast to address the rising cost of living and the
risk of social isolation facing single women over 55 years old living alone.
It is a new concept that will be evaluated at the end of the year, with the intention of expanding the service to the broader community.
BTH is a platform for participants to find someone to share with, it does not provide housing but does link people together who are interested in sharing their home, so that they can reap the benefits of a shared housing situation.
Interested people are invited to register to either share their home or find someone with whom to share a home.
The project aims to promote companionship, affordability and peace of mind for women over 55.
“You are in control,” its website tells prospective clients.
“We will not match you with another person. We believe that you can make those decisions yourself if you have the right information to start with.”
From there the program proceeds with:
• Undertaking reference and police checks on all participants
• Requiring those sharing their home to offer similar security of tenure to those of the private rental system.
• Having participants sharing using the free Better Together support services if the relationship is not working as expected within
the first six months of being established.