One out of four Australians will likely retire without homes given the present attitude toward superannuation, according to Retail Employees Superannuation Trust (REST).
A new white paper by REST Industry Super is calling on individuals, the finance industry, media, government and superannuation funds to change their attitude to superannuation as increasing numbers abandon the “Great Australian Dream” of owning their own home.
The Home Ownership and Superannuation White Paper examines how, with many Australians choosing not to, or unable to enter into home ownership, buying property will no longer be the largest investment they make in their lifetime.
Currently, 15 per cent of Australian retirees do not own their own home. In the next five to 15 years there will be closer to 20 per cent of individuals retiring without owning their own homes, while in 15-25 years time this is likely to have risen to about 25 per cent.
REST Industry Super CEO, Damian Hill said in light of this decline and superannuation increasingly becoming the biggest financial decision a person will make, an attitude shift is required to apply the same level of attention to our retirement nest-eggs as we previously would have to purchasing a property.
“Historically, home ownership rates in Australia have been very high; around 80 per cent by retirement age. However the home ownership rate for those under 35 is less than half this and is in serious decline. In the last financial year alone, the number of first home buyers in Australia declined from 190,000 to just 90,000.
“While some young Australians are consciously deciding not to purchase property, many others want to buy a home but are unable to because of the reduced affordability of housing, especially in the capital cities.
Mr Hill said the problem with this is that so much financial advice and policy has been developed around the assumption that people will own their home when they retire. But while home ownership has long been one of the key pillars of Australia’s retirement income policy, it is certainly showing signs of crumbling.