Housing affordability crisis hits retired Australians
New research from The Australia Institute with YourLifeChoices, published in the Retirement Affordability Index 2017, shows the housing affordability crisis is not just an issue for younger Australians.
Economic measures usually put all retired Australians into a single group. This analysis breaks down Australian Bureau of Statistics (ABS) Household Expenditure Survey separately by:
- couples who earn most of their income from the pension and own their own home
- singles who earn most of their income from the pension and own their own home
- couples who earn most of the income from the pension and rent
- singles who earn most of their income from the pension and rent
- couples who earn most of their income from private investments and own their own home
- singles who earns most of their income from private investments and own their own home.
The study finds that retired renters spend on average almost 30 per cent of their income on housing, which is the rate by which people are considered in ‘housing stress’.
Additionally, measuring CPI (inflation) effects in separate groups reveals that retired Australians in rentals have higher price increases for their cost of living than other retirees, and higher than average across all ages.
“This is a big issue, and the data shows it is heading in the wrong direction,” Senior Economist at The Australia Institute, Matt Grudnoff said.
“The big expenses for retired people are going up faster for those in the most precarious economic situation.
“While there has been understandable concern about young people struggling to enter the housing market, there is a hidden group of retirees in serious financial stress which is compounded if they do not own their home.
“One of the things that this group is cutting back on to pay for high housing costs is healthcare. Obviously an elderly person choosing to not seek healthcare, because they can’t afford to, risks bigger health issues and far greater costs down the line,” Grudnoff said.
Retirement Affordability Index 2017, produced by YourLifeChoices and The Australia Institute is available - here.