Many Australians still believe they’ll finish work with a mortgage-free home and enough super to live comfortably.
But the reality is shifting rapidly, and it threatens to reshape how we think about both retirement and property investing.
More of us are likely to be renting in retirement, still paying off mortgages, and having to use significant chunks of our super just to cover basic housing costs.
Whether you’re a seasoned investor or a young buyer saving for your first property, this trend matters because it’s going to directly influence the future of housing demand, super balances, retirement planning and even the way we assess property markets.
What the data reveals
Approximately 12% of Australian retirees are currently renting, a figure that has doubled from 6% in 2003, with projections suggesting this could rise to around one-quarter within two decades.
While 78% of over-65s own their homes, renters face increased financial pressure, with the share of retirees in the rental market rising significantly.
In fact, many Australians haven’t even thought about retirement planning, especially in relation to housing and super.
It’s labelled a “sleeper issue”, because while superannuation and housing are often treated separately in financial planning, they are deeply linked in determining retirement outcomes.
Research by Super Consumers Australia found that a single person who rents in retirement will need almost double the superannuation balance of a homeowner, new research suggests.
They suggest a typical single retiree who rents will need $659,000 in super to ensure a "decent standard of living". For a couple, they would need a combined super balance of $786,000.
These numbers assume a single person rents a one-bedroom apartment and a couple rents either a one-bedroom or two-bedroom apartments in a capital city.
Why is this happening
There are three big structural forces at work:
- Home ownership rates are declining across the generations.
Younger cohorts are less likely to own by age 30 than previous ones, which pushes mortgage timelines further into later life and retirement. - Houses costing more and wages lagging means longer loan terms.
For many, paying down a mortgage into their 60s or even 70s is becoming normal, diminishing discretionary income in retirement. - Super doesn’t compensate for high housing costs.
Traditional super balances are meant to provide annual income in retirement, but do not factor in the very real cost of ongoing housing commitments, whether that’s rent or mortgage. Without a paid-off home, retirees often have far less discretionary retirement income.
The Super – Housing link: a two-way street
This isn’t just a retirement planning problem. It goes deeper.
Superannuation was designed principally as a retirement store of value, and policy frameworks like the newly legislated superannuation objective reinforce that its purpose is to preserve savings for retirement income, not short-term use.
But as home ownership becomes less assured:
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- Some proposals have recommended allowing access to super for housing deposits or at least using super to help achieve home ownership earlier.
- Others suggest making home equity more accessible in retirement to support living costs.
Both concepts recognise that for many Australians, housing equity is the biggest asset they’ll ever own, often bigger than super.
But they also come with trade-offs because using super early to buy property inflates demand and pushes prices up, making housing even less affordable.
Renters in retirement are the worst-off group
One of the most overlooked inequalities in retirement is the difference between housing outcomes for owners vs renters:
- Renters approach retirement with much lower super balances.
- They also continue to pay rent in retirement, often with limited income support to match rising rental costs.
This aligns with broader data showing that a growing share of older Australians are renting or struggling with housing costs.
If we don’t address this, large cohorts will retire in financial stress with much of their super consumed simply to stay housed.
Why this changes the investment landscape
For property investors, these trends shift the market narrative in important ways:
1. Demand for affordable housing near services will grow
Younger buyers may prioritise affordability and shorter commute distances, not just capital growth, but to reduce long-term debt burdens.
2. Intergenerational wealth transfer becomes central
Those who own homes and accumulate property equity will be better positioned not just for retirement, but also to support younger family members, only widening the wealth gap between families that own property and those that don't.
3. Policy shifts are inevitable
I believe we can expect more debate in the future over:
- Super access rules for housing deposits or equity release options.
- Rent assistance increases tied to actual rental costs.
- Housing supply strategies to curb price escalation.
The bottom line
Too many Australians still think of housing and super as separate and that separation is now costing them real financial security.
The data suggests a future in which more retirees are renters, mortgages extend into retirement, and super balances are strained to cover basic housing costs.
To help solve this problem, we require policy reform, smarter financial guidance, better housing supply strategies, and investment thinking that anticipates these demographic and economic shifts.
