Empty nesters cannot downsize, so younger families locked out of property market

UPSIDE Realty CEO and founder, Adam Rigby, is concerned about the trend for older Australians to live in their homes years longer than is suitable for them, because they fear market uncertainty and the costs associated with selling. The outcomes are affecting young families that, in the past, would  have bought into those types of homes.

“This is one person living in an otherwise empty six-bedroom house – there are more than 100,000 underused houses in NSW and Victoria alone,” Mr Rigby said.

“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.” 

The latest ABS data shows that 49 percent of Australians are living in ‘under-utilised’ dwellings – in houses with two or more empty bedrooms. This number increased throughout the property downturn last year, Mr Rigby said, and has now spiked with the drop in sales volume 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. This stalemate has been going on for the last 18 months or more.

“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 noted that Australia was unique in the world in terms of 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 said.

In Victoria, homeowners who pay $680,000 for a home have to come up with a further $35,870 in stamp duty. In NSW, homeowners buying for the same amount have to pay $26,032 in stamp duty. In Queensland, the stamp duty on a home of the same price is $16,450.

Upside Realty is a fixed-fee real estate company disrupting the industry in seven markets across the country, including Sydney, Melbourne and Canberra. Home vendors work online with an experienced agent to sell property for a fixed fee of $8,900 for private treaty or $9,700 for auction.




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