Elderly Australians are set to become the new housing poor, with just one in 40 over-65-year-olds expected to own their home outright by 2051.
A new Australian Housing and Urban Research Institute study has warned that the share of older Australians still paying off a mortgage will more than triple by the middle of the century.
Yet over the same period, almost nine in 10 will find themselves on low incomes, threatening their capacity to make repayments and cover the costs of living.
Study co-author Catherine Bridge, of the University of NSW, said the trend results, extrapolated from census data, surprised even the researchers who conducted the analysis.
“It’s more alarming than we expected,” she said.
Just five years ago, about 40 per cent of over-65-year-olds owned their homes, outnumbering the 26.5 per cent paying off their home loans.
By 2051, only 2.5 per cent will be mortgage-free, with 86.2 per cent still making repayments.
Dr Bridge said it was unclear what was driving the decline in outright home ownership but said a loss of equity due to divorce and the high cost of buying into the nation’s expensive property market may be factors.
She said older Australians who lacked equity in their home in retirement were more financially exposed because they had nothing to draw down upon to meet large or unexpected expenses.
The study forecast that 87.2 per cent of people aged 65 and over would fall into the lowest of five income categories by 2051.
The lesson here formulate a plan or strategy for your wealth creation and then adhere to it. If you just let things happen…most likely they won’t.
Get into the property game sooner rather than later, whether it’s your own home or an investment, then build an asset base so that when you retire you will have a big enough property “cash machine” to live off.
As I’ve often said…if you do what everyone lese dos, you’ll get the same results as everyone else gets. And you don’t want that do you?
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