Most older people are open to downsizing. So what are the barriers?
Research shows more than half of people over the age of 55 are open to downsizing. But experts say there are barriers stopping older people moving into smaller homes.
Eighty-two-year-old Eleanor Shearing has lived in Seaford, a coastal suburb of Adelaide, for five decades. Her three-bedroom home, once a hub of family life and community, is now challenging for her to manage on a single income. Despite four years of attempts to downsize, she fears leaving Seaford entirely.
Research indicates over half of people over 55 are open to downsizing. However, Eleanor's hesitance stems from the difficulty of starting anew and the fear of losing her community connections. The Productivity Commission highlights planning laws, housing supply limitations, and restrictive zoning rules as key barriers. These regulations, according to the commission's chair Danielle Wood, make projects slower, more expensive, and limit housing variety.
Matthew Bowes of the Grattan Institute notes that desirable areas with aging populations often face restrictive zoning, limiting the supply of downsizing-friendly homes. Stamp duty, a tax on housing transactions, is another major hurdle, discouraging downsizers from moving to smaller homes. In response, the South Australian government has abolished stamp duty for those over 60 moving into new builds, while the Australian Capital Territory plans to phase out stamp duty entirely.
However, implementing a universal land tax, a more stable and fair alternative, faces challenges. Two-thirds of properties remain exempt from land taxes, and politically, the change impacts all landowners, not just investors. Christine Toose, a 70-year-old Queensland grandmother, faces similar barriers as she seeks to downsize from her four-bedroom home to Victoria. Despite her desire to age in place, the cost of stamp duty has prevented her from selling her current home.
Toose emphasizes the need for incentives to help baby boomers downsize, as moving out of a long-time home is an immense challenge. The majority of older people wish to age in place, but dwindling mortgage payments force them to find a solution soon.
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