Seniors Urged to Take Advantage of Unlocking Home Equity

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As median house prices continue to climb across most capital cities, many asset-rich cash-poor seniors are missing out on an opportunity to build on their existing home equity and improve their living standards.

Author and finance expert, Rachel Lane said everyone had the option of staying in their own home, but many found it to be too much maintenance or too lonely, or they require a financial injection.

“Seniors can boost their cash reserves by tens or hundreds of thousands of dollars by selling while prices are high and moving into more affordable accommodation.

According to Ms Lane, there is great confusion amongst many people about the types of affordable housing available.

“Senior homeowners looking to downsize needn’t be competing in the private market against homeowners and investors, which is a common fear, as there are a variety of traditional and new home options to suit,” Ms Lane said.

“Lifestyle-focused land lease communities for example are one of the newest catering to this specific market.

“While the homes on offer are of an increasingly high quality, the entry price point is kept low since residents lease, rather than own the land, with weekly fees in the $120-$160 range. This pricing model eliminates the need to pay stamp duty, entry and exit fees and in some cases, the resident is then eligible for rent assistance.

“One such operator – Ingenia Lifestyle – has over 30 communities across New South Wales and Queensland and Victoria.

“For example, in south west Brisbane, the median house prices in areas like Shailer Park ($520,000) and Greenbank ($576,000) are double the $251,000 starting price point for the nearby Ingenia Lifestyle Chambers Pines community.

“I would urge seniors to pay close attention to median house prices in their area and affordable housing price points like these to get a better sense of the type of cash reserves they might be able to access.”

“While housing affordability is generally considered a young person’s issue restricting entry to the market, it is also a major problem for those that do own a home but rely on a low weekly income,” Ms Lane said.