A new realestate.com.au GemLife Downsizing Australia Report has revealed that older Australians are holding onto more housing stock than they need, with significant implications for the broader property market.
The report, based on the views of 2,051 buyers surveyed by realestate.com.au, found that 85% of households aged 55 and older have two or more spare bedrooms, compared with just one-third of younger households. By contrast, a quarter of those aged 25-54 have no spare rooms, while 5% have too few bedrooms for their family size.
With over one-third of Australia’s population projected to be aged 55 or older by 2050, researchers say encouraging downsizing is crucial for both meeting the needs of an ageing population and easing housing supply pressures.
The survey showed that three in five (59%) older homeowners would consider moving to an over-50s lifestyle or retirement community, including 17% who said they would “definitely” make the move.
The top motivations for downsizing were lower-maintenance living (34%) and retirement (29%). However, barriers remain, with the hassle of moving (18%) and not finding the right-sized home (17%) cited as the most common concerns.
REA Group senior economist Angus Moore (pictured) said Australia’s housing stock needs to evolve alongside demographic change.
“Australia’s population is aging, with over one-third to be aged 55 or older in 2050. As our demographic makeup changes, so too will the types of housing we need,” Moore said.
“Older households are smaller, but much of our existing housing stock and the housing we build is still large, detached homes that may be better suited towards larger family households.”
GemLife Managing Director and Group CEO Adrian Puljich said purpose-built housing models, such as land lease communities, are a major driver in encouraging older Australians to downsize.
“Many older people stay put simply because there is a lack of suitable housing for their over 50s and beyond, but struggle to maintain often large, ageing family homes,” Puljich said.
“When there are appealing alternatives – and that means homes that are easy to look after, close to the people and places they love, and designed for how they live now, and will in the future – we see they are willing to downsize and often wish they had done so sooner.”
He added that land lease communities are among the fastest growing housing types in Australia.
“They are specifically designed for this demographic, with supporting facilities that promote wellbeing, connection and lifestyle and a financial model that helps free-up capital for retirement,” Puljich said.
Beyond retirement communities, lifestyle factors are also shaping downsizing decisions. A sea- or tree-change was a driver for 11% of respondents, with proximity to bushland (23%) or the beach (22%) key considerations.
Downsizers are also prepared to spend more for the right features: 67% said they would stretch their budget for preferred amenities, with bedrooms (72%), garages (62%) and natural light (50%) topping the list.
Sustainability is another growing priority, with 55% of downsizers valuing solar energy and water systems, compared to 39% of all buyers. Easy access to medical and health services was also rated highly (47% vs 27% for all buyers), reflecting the importance of reliable healthcare for this demographic.
Separate Ray White research shows Australia’s capital cities are collectively losing nearly 23 affordable homes every day, with Sydney alone shedding 5.8 affordable houses daily – the equivalent of one disappearing every four hours.
For mortgage brokers, these pressures underscore the critical role of downsizing in unlocking housing stock and reshaping lending demand, particularly as older Australians weigh retirement living against holding large family homes.
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