Is downsizing a size too big for government?

Article published 3 July 2023

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Is downsizing a size too big for government?

All agree that downsizing is good but governments aren't doing enough to promote it to the benefit of older and (indirectly) younger people.

ARE you looking to downsize? Is your home too big, too difficult to get around in, and would a smaller, cheaper home solve two problems, better accommodation and more money-in-savings?

Not everyone will answer these questions with a ‘yes’, but many will. In fact, downsizing is regarded by government policy makers as something that would help solve (or at least alleviate) a number of problems.

It would give older people healthier lives and better quality-of-life, meaning less demand on health services.

It would reduce demand on funding for the Age Pension in many cases.

It would free up a lot of urban land for redevelopment and help alleviate the housing shortage.

But as anyone knows who has made inquiries about downsizing options in their area, the small, cheaper stock of homes is largely non-existent.

Downsizing from a developer’s point of view

Housing advocates have been saying all this for years, if not decades, but the problem persists.

It is good, therefore, to hear a (presumably) hard-nosed property researcher tell the staid and conservative Australian Financial Review the same thing. Before we quote him, we need to say that his comments are comments made from a property developer’s point of view. His comments focus on capital cities, for example, and ignore downsizing needs in regional Australia. As a property developer, he also doesn’t talk about accessibility features, which add to construction costs. However, the fact he is using the same arguments as the usual housing advocate is noteworthy.

“If you talk about the housing crisis, the opportunity the government needs to understand is people who bought their homes twenty or thirty years ago and paid them off but can’t actually move because there’s a scarcity of local medium-density,” said Mr Temlett​, research director at property advisory firm Charter Keck Cramer.

“Greater density [of housing] would allow them to stay in their area and their kids and grandkids to stay in those areas and improve the life cycle of the suburbs that are overweight with detached dwellings.”

In Mr Temlett’s view, many retirees would be happy to move into medium-density homes in their existing neighbourhoods to remain close to friends, local doctors and other familiar facilities such as shops and community centres.

Mr Temlett reckons developers are ready to build this type of downsizing accommodation in a radius of ten to thirty kilometres from the CBD, where there are already the best existing infrastructure and services.

His demographic analysis of Austalian Bureau of Statistics census data shows there are many people over-55 who own outright detached houses, in suburbs within ten to thirty kilometres from city centres.

“These capital city suburbs actually need to get greater levels of density to make them as liveable as possible for downsizers that need appropriate accommodation,” Mr Temlett​ said.

“Getting certainty on planning, in terms of timing and what sort of buildings they can get, is absolutely critical and will help bring a lot of projects to market. It will deliver more affordable apartments and make the cities more liveable.”

What’s government doing?

Apart from allowing older people who sell their house to put proceeds into their superannuation, governments around Australia are not promoting downsizing.

In New South Wales, the new Government appears to be making medium and high density housing a priority, talking tough about making councils fall into line. However, the Government is not specifically doing this to facilitate downsizing by older Australians, but to help solve a housing crisis that can affect people of all ages.

The inclusion in the National Construction Code of improved accessibility standards is important for downsizing. However, it does not directly promote downsizing. To boot, it was left up to each state and territory to decide whether to opt into enforcing the accessibility standards, which most state and territory governments did, but not Australia’s most populous state. Neither did Western Australia.

These accessibility standards include requirements such as a step-free accessentry, a minimum width for internal corridors to allow mobility aids, and a shower without a step.

Features such as these are vital to many people with accessibility requirements including older people.



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