Barry Parrish knew it was time to move home after suffering his first heart attack.
The 73-year-old retiree was living in Portland, NSW at the time – a small town without the means to deal with a life-threatening health scare.
“I had to go by ambulance to Orange, which is a fair distance from Portland, as that’s the closest hospital that caters for anything to do with the heart,” Mr Parrish told The New Daily.
“Luckily they got me there in time. But it made me think, ‘What if I have another heart attack and don’t make it to Orange?’”
Moving closer to a better-equipped hospital was critical, Mr Parrish decided.
And his “crook knees and crook back” motivated him to find a home with less upkeep, too.
It’s a decision most households consider at some stage.
But a new report by the Australian Housing and Urban Research Institute (AHURI) found that, unlike Mr Parrish, who has acted on his deliberations and moved to a small cabin at Harrington, NSW, most home owners are choosing to “age in place” rather than downsize.
The report, which analysed data from the Census and Melbourne Institute’s HILDA survey, found that roughly 65 per cent of home owners aged between 65 and 74 in 2001 were living in the same property 15 years later.
The reasons people are staying put
According to lead researcher Stephen Whelan, most people only consider downsizing if they fall ill or lose a partner.
Stamp duty and the exemption of the family home from the aged pension asset test also discourage downsizing, he said.
But “key life events” have a much greater impact.
“Economic considerations don’t seem to be critical, but nonetheless we’d argue that policy should take them into account and should be set in a way that facilitates downsizing, if and when it’s appropriate,” Dr Whelan told The New Daily.
Including a portion of each retiree’s home in the aged pension asset test and replacing stamp duty with a broad-based land tax would also make downsizing more attractive, Dr Whelan said, but only “at the margins”.
“If you imagine there’s one million old home owners who potentially could downsize,” he said.
“These types of changes are not going to affect everyone’s behaviour because, for many people, it will be the death of a spouse or ill health that forces them to downsize.”
Economic factors are less influential
That’s how it went for Mr Parrish. The suffocating loneliness that took hold after losing his partner, Margo, made him consider moving.
And his deteriorating health slowly forced him to act.
Mr Parrish said maintaining his “average-sized house” in Portland had become so difficult that leaving his home of 17 years was “easy”.
“Because it’s so hilly, I couldn’t get around in Portland. I was stuck at home on my own most of the time. All I had was basically the TV or the radio to listen to – that was my life,” he said.
And because of my health, if I make it to 80, I reckon I’ll be doing well. I’m realistic to the fact that I’ve only got maybe six or seven years to go … so I want to be happy – and, of all the reasons, that’s probably the main reason [that I’ve moved].’’
AHURI’s research comes at a time of heightened scrutiny of the tax system’s generous treatment of housing.
Many economists have argued excluding the family home from the aged pension asset test discourages older households from downsizing – making it harder to match housing to people’s needs and preferences.
Others have said it perpetuates inequality, as more and more Australians are retiring as renters.
And journalist George Megalogenis and economist Nicki Hutley told The Australian’s property podcast this week that favourable tax rules had fuelled a “dangerous obsession” with property and led to an unsustainable credit boom.