How ageing will affect the Australian housing market over the long term

As the number of people over 50 increases and household structures change, Australia will inevitably experience changes in its housing market. So, what can we expect? 

The number of people in Australia aged over 65 will double by 2031
According to the Australian Bureau of Statistics, the number of people in Australia aged over 65 will double by 2031, to about 5.4 million people. There have also been significant changes in household structures over the past 20 years.

Another major forecast trend?
There will continue to be growth in the number of single-person households. These shifts and changes in our population will produce some key trends in the market across the country. These include an increasing number of people facing dilemmas about whether they can live out their retirement in their family home, issues about accessibility and safety in their homes, and demand for manageable and efficient housing.


According to research, the overwhelming majority of retired Australians – nearly 90 per cent – want to stay in their own homes in neighbourhoods they are familiar with.

But most of these homes were designed to accommodate larger, younger families rather than the needs of seniors. International trends In countries like the U.S.A. and Canada, which show similar demographic trends, the growing trend to stay in your home is delivering strong growth in specialised renovation services that specifically focus on modifications to traditional home design to keep retirees more comfortable and safe, and able to stay in their own homes for far longer. This is a trend we would expect to see emerge here; as baby boomers realise they need their homes to fit their changing lifestyles.

Modifications to homes to help
Modifications would typically include compensations for a reduced range of motion and strength, particularly in the kitchen and bathroom areas, and features to assist with mobility and agility such as access to the house and garden and between rooms in the house. It is likely these features will become more attractive and important to home buyers in the future and it would be well worthwhile for home buyers and owners to begin considering how their existing or potential home will accommodate them as they gain in years. Will it be possible to easily make modifications if or when they become necessary? Will your home become difficult to maintain in future years or as your income reduces? Similarly, there will be demand for new homes that incorporate design principles to broaden a home’s accessibility, usability and safety for all household members, from a family with children through to retired adults.

Strong desire to stay living at home
With the first of Australia’s baby boomers entering the over 80 age segment by 2020, the challenge for the housing industry and home owners is finding a balance between traditional home ownership and retaining people’s independence, and keeping them close to their neighbours, family and friends. The strong desire to stay at home will also continue to add pressure to high-population centres and the traditional ‘family’ suburbs that have developed around schools and transport centres in Australia’s capital cities, as the seniors of our community continue to occupy existing homes. The government sees its priorities a little differently and has mooted tax changes that might encourage people living in larger homes to downsize, thereby freeing up housing supply for younger families. Such discussions have raised the ire of some seniors groups, who are defending their right to stay put.

Expert opinion on downsizing
In a Sydney Morning Herald article, Simon Cowan, from the Centre for Independent Studies, said including the family home in the pension assets test would be a good way to encourage older Australians to downsize. "At the moment, you have a disincentive to downsize because it can lead to a reduction in pension income and, when you add in the cost of stamp duty and the cost of moving, the amount of capital you release from downsizing is not that high."

Grattan Institute director John Daley said another way to encourage downsizing would be to significantly reduce or abolish stamp duties, and replace them with property levies instead. "That way you would be charged more for living in a house and less for selling it," Mr Daley said. "At the moment we've got the incentives in completely the wrong direction. You're paying the stamp duty when you sell the house [and buy another one], but you don't pay much for living in it. We need to flip that around so you don't pay a penalty for (moving) house but you do pay extra for living in something bigger than you really need."

What are your plans for the future and what do you think government policy should be?