It is fair to say that the housing situation of Australian seniors right now is “not the best”. Of course, that would be putting it mildly as the situation is quite messy. The absence of government regulation is obvious and causes a lot of harm. At least a few years ago Labor wanted to change things by introducing the “Housing Help for Seniors” program. It had a nice idea although the execution was somewhat lackluster. The program was about encouraging retirees to sell their homes and downsize.
The purpose of the whole thing was for seniors to get rid of the big and somewhat dangerous family houses and then live off the interest rates after the sale or at least have a good top-up of their pension every week. This would of course lead to some cost to the state budget and this is why the new government decided to slowly “strangle” the program down along with the senior members of our society.
There are two other options that elder fellas have when it comes to living somewhere. Retirement villages are pretty popular and in all fairness, are not a bad option. Unfortunately they are regulated in an exceptionally unclear and bad way. States have various approaches to regulating these villages and companies don’t want to come nowhere near them when it comes to offering real estate and financial services.
Families usually end up paying forever without receiving anything in return. Had the government interfered and regulated these retirement villages then things would be much easier. For instance, the ways to charge people should be reduced in number and the fees and prices that you pay at such a village should be looked at as if it were a utility.
With Deferred management fees and also Departure fees, getting rid of a property in a retirement village can be a nightmare. In the end, you shouldn’t even expect to receive any money but just keep paying fees to the operator.
Lifestyle communities are the second option that seniors have when it comes to settling down somewhere. They do have similarities with a typical retirement village but are actually more like caravan parks with permanent structures. Buying a home there means you become owner of the house but not the land underneath. You need to pay rent for the land as if it is a caravan park. There is one positive and it is related to the fact that you can’t be evicted unless you miss payments. Owners can sell the home and with it the right to rent.
At the end of the day both of these options are for people looking to not pay a lot for housing. There is also government aid called rent assistance. About 30% of the rent is covered by the government and that’s a good thing.
However, don’t expect any capital gain if you decide to move or sell your home. It is becoming clearer and clearer that the government needs to find a way to regulate this aspect of Australian seniors’ life.