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If you don’t own a home by 45, you probably never will - featured image
By Brett Warren

If you don’t own a home by 45, you probably never will

If you do not own a home by the time you are 45, you are unlikely to ever own one, according to a report from Swinburne University of Technology.

The report which was published last year - Security in retirement: the impact of housing and key critical life events - has painted a grim picture of Australians’ housing security, with a widening gap between home owneRealtor giving house key to buyer in empty roomrs and those in private rental accommodation.

This generation of renters will be unable to save for retirement, with the housing market itself a “source of impoverishment”, and they will be more vulnerable to adverse life events such as the breakdown of a marriage or redundancy according to the report.

The study found that close to 426,000 Australians over the age of 50 years are living alone or with a partner in private rentals.

That figure is predicted to climb to 606,300 people in 2030 and 832,319 by 2050, putting more pressure on the rental supply and keeping rents high.

The study also concluded that single mothers and divorcees were particularly at risk of never owning a home if they passed the 45-year-old threshold, with seriously dire consequences for their retirement.

Study author Swinburne University’s Dr Andrea Sharam said:   

“It’s just almost too late for people at 45 if they’re not already purchasing their house and got that mortgage down a bit.

Housing is a probably the key way of generating wealth, but people who are unable to purchase or fall out of home ownership will find that they don’t have as much wealth in retirement.”

Those renting in midlife (defined as aged 45 to 49), either alone or with partners, were likely to continue to rent – and be “highly impoverished” – in retirement.

"If they can’t break out of it early on, they’re going to be trapped in that cycle,” said Dr Andrea Sharam, a research fellow at the School of Arts, Social Sciences and Humanities and one of the report’s three co-authors.

Women more vulnerable

Women were particularly vulnerable as they not only tended to be poorer than men, but more susceptible to having their wealth impacted by “critical life events”.

Renters over the age of 70 were twice as likely to be women and very poor.

Sharam and her co-authors have called for substantial investment in affordable housing to provide non-homeowners who are not eligible for social housing but cannot afford to buy themselves with more options and security in later life.

“If such housing is not forthcoming over future decades, Australia will have a sizeable minority of its older households in a unsustainable housing position.”

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.
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