Plan that could make Boomers richer

PHOTO: The number of houses on sale is currently low. Picture: NCA NewsWire / Nikki ShortSource:News Corp Australia

A measure to entice older Aussies out of their homes to free up properties is unlikely to help young house hunters, who are dealing with skyrocketing prices and low stock levels.

In Tuesday’s budget, the government announced it was extending access to the downsizer scheme by reducing the minimum age requirement from 65 to 60.

The scheme allows older Aussies to sell their house as long as it has been owned for at least 10 years, where they can then make a one-off, post-tax contribution to their superannuation of up to $300,000 per person or $600,000 per couple.

However, the scheme was first announced in the 2017-18 budget and there has been little appetite for it among the older generation, according to Eliza Owen, head of research at CoreLogic.

“It’s worth noting that in the almost three years since the scheme was implemented, only around 22,000 individuals have accessed it, so this may not add materially to supply,” she explained.

Housing demand remains high against a low supply of available properties with total listings volumes sitting at 23.4 per cent below the five year average, CoreLogic figures show.

Just over 7000 older Aussies a year have accessed the downsizer scheme since it launched. Picture: iStock Source: Supplied

The new policy is only due to kick off in July 2022, which is also problematic considering the current climate, Ms Owen said.

“This means motivated downsizers aged 60 to 64 may wait for the scheme to come into effect before selling, and any impact of increased listings as a result would only impact the housing market then,” she said.

Dr Andrew Wilson, chief economist at property technology and design company Archistar, agreed that the scheme has seen limited success and attributed it to a lack of suitable next-stage downsizer accommodation.

“The reduced age eligibility will only exacerbate this issue, with the clear shortage of reasonably affordable, medium-density and larger higher-density dwellings in established middle and inner suburbs,” he said.

“The availability of appropriate suburban downsizer accommodation likely takes priority over financial incentives, particularly for a younger demographic.”