Struggling to pay mortgages a concern

A study, which shows the number of older Australians still paying off a mortgage will more than triple by 2051, will put additional pressure on the government as it attempts to create more affordable housing incentives in the future.

The study’s lead author at the University of NSW, Dr Catherine Bridge, tells DPS eNews just one in 40 people over the age of 65-years-old are expected to own their homes outright by 2051.

Surprised by the findings collated after a review of census data from 2001 and 2006, Dr Bridge says researchers at the Australian Housing and Urban Research Institute did not expect the trend to be of such a “big magnitude”.

“It will certainly put additional pressures on planning and what housing providers are going to do to create more affordable housing incentives… and it may mean we have older people migrating to outer urban areas and regional towns where care and infrastructure services are more accessible,” Dr Bridge says.

According to Dr Bridge, there are many factors which come into play in the housing market and are reportedly making affordable housing more “out-of-reach” as people age.

“Making choices like putting children into private schools; the number of older people experiencing late-life divorce; the death of a spouse; and being made redundant from their jobs can also impact a person’s economical ability, and therefore they cannot pay their home loans,” Dr Bridge says.

The study indicates about nine in 10 older Australians will be on low-incomes which will reportedly “threaten their capacity to make repayments and cover the costs of living”.

According to statistics, about 40% of people over the age of 65 years owned their homes just five years ago. Predictions now suggest by 2051, only 2.5% will be mortgage-free, with 86.2% still making repayments.

Dr Bridge and her colleagues are now writing a research paper which looks at the downsizing of property in older people.

“As well as the issue of low to moderate income people, the proportion of this population, which is increasing at the moment, is relatively wealthy… but the number of poorer people increasing is also very substantial,” Dr Bridge explains.

“There will be a very serious future issue of housing supplies… and traditional [housing] options like aged care may not be available,” she claims.

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