Home ownership the key to economic prosperity for ageing Australians

5 March 2004

Treasurer Peter Costello’s statement flagging concerns about an ageing Australia and the capacity of government to meet the financial needs of an ageing community highlights superannuation and access to the workplace as the cornerstones of the government’s response to the changing demography of Australia. While this is a good starting point, broader options are needed to address the issues of self-funded retirement. The Real Estate Institute of Australia (REIA) believes any discussion on superannuation and self-funded retirement implicitly assumes home ownership.

‘For all Australians, owning one’s home is a first important step towards financial security. This is increasingly significant for the aged and those approaching retirement,’ says Kareena Ballard, REIA President.

‘The crucial role played by home ownership in the economic well-being of the aged should not be overlooked. The social and economic benefits derived from home ownership contribute to the fabric of a prosperous society with a high standard of living. Without their own homes, the elderly are potentially marginalized and certainly impoverished. In addition, there are huge savings to the taxpayer when the elderly live in their own homes rather than in public housing or aged care facilities,’ says Mrs Ballard.

‘Self-funded retirement strategies advocated by the major political parties assume home ownership. Investing in property is an additional strategy many Australians successfully employ to self-fund their retirement, either through direct or indirect investment. Ensuring that taxation policy promotes the capacity of Australians to become investors in all classes of investment products including property will contribute to easing the social welfare burden on government. In that context, the REIA supports the retention of negative gearing for property investments.’

‘Further we call upon all levels of government to work together to address the problems of housing affordability as identified by the Productivity Commission’s Inquiry into first home affordability. A house purchase is the most significant investment most Australians make in their lifetime. Access to home ownership must be assured for the present and coming generations, as well as for today’s elderly.’