Housing Affordability Not Just a Young Person’s Issue
Housing affordability is generally considered a young person’s issue, where they face many restrictions entering the market, but it is also a major problem for those living on a low weekly income paying off an existing home.
The recent Productivity Commission report, Housing Decisions of Older Australians, recommends seniors unlock the equity tied up in their homes and use it to fund the next stage of their life and improve their well-being.
Senior living finance expert and author Rachel Lane said senior homeowners could move into more affordable accommodation and boost their cash reserves by tens or hundreds of thousands of dollars just by selling their home while prices are high.
“Households aged 65 to 74 years had on average $480,000 in home equity, which compared to the cost of a more affordable home in the vicinity of $200,000-$300,000, represents a significant gap of potential cash reserve.
“I would urge seniors to pay close attention to median house prices in their area and affordable housing price points to get a better sense of the type of cash reserves they might be able to access,” Ms Lane said.
According to Ms Lane, there is another great confusion amongst many people about the types of affordable housing available.
“Senior homeowners looking to downsize should not need to 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.
“Lifestyle-focused manufactured home estates, 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 21 communities across New South Wales and Queensland and most recently expanded into Victoria,” Ms Lane said.
Owner and operator of Ingenia Lifestyle, Ingenia Communities, Chief Operating Officer Nikki Fisher said the new Victorian community comes at a time when many Australian seniors are grappling with the issue of housing affordability, as the majority of their wealth is tied up in their family home.
“Our new community in Lara, 20 minutes north of Geelong, is an innovative seniors community offering affordable and flexible living options that appeals to many over 45s.
“There are brand new homes selling from just $175,000, which are priced at half of Lara’s median house price of $378,000 ,” Ms Fisher said.
Ingenia Lifestyle Lara boasts a state-of-the-art clubhouse that recently underwent $3.1 million worth of refurbishments, tennis court, fitness centre, spa, indoor heated swimming pool and bowling green.
The community is also in preparation for 160 affordable new homes, due to be built over a number of stages with the first of the new homes arriving mid-2016.