Australians abandon ‘great Australian dream’
One in four Australians may retire without owning their own home as home ownership rates slump and attitudes shift, according to a new white paper.
The REST Industry Super paper predicts that within 15 to 25 years as many as 25 per cent of Australians will retire without owning their own home.
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Currently, around just 15 per cent of Australian retirees do not own their own home.
According to REST, many Australians are either no longer able to afford their own home or simply choosing not to.
“Historically, home ownership rates in Australia have been very high; around 80 per cent by retirement age,” said REST chief executive Damian Hill.
“However the home ownership rate for those under 35 is less than half this and is in serious decline. In the last financial year alone, the number of first home buyers in Australia declined from 190,000 to just 90,000.
“While some young Australians are consciously deciding not to purchase property, many others want to buy a home but are unable to because of the reduced affordability of housing, especially in the capital cities.”
With home ownership rates declining the paper predicts an increasing focus on superannuation as a key wealth building strategy.
“While home ownership has long been one of the key pillars of Australia’s retirement income policy, it is certainly showing signs of crumbling,” Mr Hill said.
“This means it is essential that the other pillars, such as savings and superannuation, are strengthened to ensure Australians have adequate retirement incomes in the future.
“Ten years ago if you had asked a 25 year old what the most important financial decision they expected to make in their lifetime, most would say buying their first home and applying for their first mortgage. However with home ownership rates declining for under 35s and superannuation balances rising as the compulsory system matures, the time is right for an attitude shift to improve retirement outcomes for all Australians,” Mr Hill said.