The CEO and founder of real estate franchise Upside Realty, Adam Rigby, has noted that older Australians are living in their homes for years longer than is suitable for them, out of fear for market uncertainty and the costs associated with selling.
He added that home owners are forced to pay tens of thousands of dollars upfront in order to purchase a new home, which will continue to scare older Australians out of downsizing and price younger buyers out of the market.
“Seniors keep delaying a downsize because they are unsure about the market, and they know they will be slugged with a huge tax,” Mr Rigby said
The trend has resulted in “underused” housing across Australian markets, which not only increases upkeep costs for older Australians, but also contributes to keeping younger buyers out of the market and drives up values in periods of lessened demand.
Mr Rigby noted that the cause of this phenomena is the nature of Australia’s unique property transaction taxes, which has caused the chief executive to call on the government to reform Australia’s property transaction costs.
“The high cost of sales transactions and stamp duty urgently needs to be addressed if the government is serious about improving affordability and assisting in the nation’s economic recovery.”
Mr Rigby noted that there are more than 100,000 “underused” houses in NSW and Victoria alone, which might consist of one or two people living in an “otherwise empty” six-bedroom house.
“The increased expenses associated with running these homes is dangerously eating into retirement funds and locking families and first home buyers out of the market,” Mr Rigby added.
Further, the latest data from the Australian Bureau of Statistics has shown that 49 per cent of Australians are currently living in “underutilised” dwellings – houses with two or more empty bedrooms.
According to the Upside CEO, this figure increased throughout the property downturn of 2017-2019 and has now spiked following the drop in sales volumes led by the COVID-19 outbreak.
“In the last month, we have seen a 28.7 percent decrease in sales volume compared to 2019, a year which was already substantially down, compared to previous years,” Mr Rigby said.
“This stalemate has been going on for the last 18 months or more.”
Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.
Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency.
Hannah graduated from Macquarie University with a Bachelor of Media and Journalism.