Housing needs of asset-poor older Australians: other countries - policy initiatives and their implications for Australia

This Positioning Paper is the first output of a project that explores housing options and actual housing circumstances of asset-poor older Australians. Australia has very high levels of outright ownership among its pensioners. However, this is threatened by falling levels of ownership among younger age cohorts and increasing numbers of owners approaching retirement with mortgages. Demographic changes, labour market deregulation, housing market volatility and liberalisation of housing finance are thought to be responsible for these trends. They are likely to increase the number of asset-poor pensioners in the future. This is a source of policy concern because outright home ownership ensures low housing costs and helps safeguard pensioners from poverty in old age. However, these concerns could be overstated. Increased life expectancy might be accompanied by working longer and delayed withdrawal from the labour force. From this perspective a mortgaged old age may not have the adverse consequences feared during an earlier era when working lives were shorter.