Examines the economic impacts of Australia\u27s ageing population and decreasing housing affordability.
Executive Summary
Australia’s three-pillar approach to retirement income is internationally well regarded. However, many Australians currently approaching retirement face potential poverty, especially if they do not own their own homes. Australia’s aged dependency ratio (the number of people over 65 for every working-age person 15 to 64) is expected to double over the next 40 years, and the Australian Government recognises that current arrangements are fiscally unsustainable.
Many Australians nearing retirement age today have not had compulsory superannuation for their entire working lives. While this issue will abate as the system matures, Australians are still worried they are not saving enough to live comfortably in retirement.
Home ownership is a growing retirement issue. Renters not only have no owneroccupied housing wealth, but they also have considerably lower holdings of other forms of wealth. In younger households, the net wealth of owners is around double that of renters. In older households, the net wealth of owners is around six times higher than that of renters.
While home ownership among current retirees is up to 85 per cent, increasing numbers of retirees do not own their own dwellings and live at the mercy of the expensive private rental market in low economic resource (LER) households. The number of older income- and asset-poor households is likely to grow rapidly over the next 40 years, and many are likely to be in the private rental market
