Would you sell your house just to help your kids buy theirs? Some senior Aussies already have
- Replies 0
The debate around downsizing has put older Australians in the spotlight—but there's more to the story than meets the eye.
What seems like a simple decision about lifestyle and space is tangled up in complex financial realities and government rules.
As it turns out, staying put might not just be sentimental—it could be strategic.
Aussie seniors often find themselves under fire for staying in homes that appeared far too big for their needs—but a closer look revealed why many of them had no intention of moving.
Despite years of pressure to downsize, new data from the Regional Australia Institute showed that only 25 per cent of Australians aged 65 and over were willing to trade the city for a regional lifestyle. It was the lowest figure of any age group. In comparison, Millennials appeared far more open to a tree change, with 57 per cent expressing interest, followed by 37 per cent of Gen Xers.
On the surface, the financial appeal of selling up seemed obvious. Offloading a $2 million home in Sydney and buying a $1 million property in places like Port Macquarie or Coffs Harbour could leave retirees with a tidy $1 million in spare change. But that windfall came with a catch.
While the family home was exempt from the age pension assets test, anything left over—whether in cash or superannuation—was counted. That meant selling could backfire financially, potentially disqualifying a retiree from receiving a full or even partial pension.
Many seniors, aware of this, decided to stay put, even if their homes were emptier than ever. According to financial adviser and author Helen Baker, some only considered selling once their superannuation had dried up.
‘They usually only sell when they've run out of super and downsizing is their back-up option to release more cash,’ she explained.
In theory, retirees could invest their sale proceeds into super and generate an income stream through an annuity. But in reality, hanging onto the age pension came with a long list of perks—from help with electricity bills and medical costs to extra money for travel.
‘There are benefits in even getting a part age pension,’ Ms Baker said.
The Association of Super Funds of Australia estimated that a couple needed $73,875 annually for a comfortable retirement, which included the occasional overseas holiday. However, with access to a pension, Australians aged between 65 and 84 could feasibly live on $43,753 per year.
For many, the decision wasn’t just about downsizing—it was about survival. Meanwhile, the younger generations were struggling with a completely different housing dilemma.
Helen Baker, who founded On Your Own Two Feet, said younger Australians needed to consider teaming up with friends or siblings to get on the property ladder at all.
‘I think the problem for younger people now is they don't get in,’ she said.
With median house prices in capital cities sitting at $1.026 million, and the average full-time salary at $102,742, many banks were only lending up to 5.2 times a buyer’s pre-tax income. That left single buyers able to afford properties worth about $665,000—with a 20 per cent deposit. For those without help from the so-called Bank of Mum and Dad, the market was almost impossible to crack.
‘It's likely that property will continue to rise over the short-term, maybe, and even definitely the medium, long-term,’ Ms Baker added.
She noted that those in lower-paid professions such as nursing, aged care, teaching and childcare were finding it especially hard to buy.
‘The nurses, the teachers, aged care workers, childcare workers, hairdressers, for these people, it's incredibly difficult for them to purchase a property but those who are in more executive positions, or even tradies these days with what they're earning, they have more of an opportunity,’ she said.
But the cost of entry wasn’t the only barrier.
‘Are they willing to make the sacrifices in other things that they're spending their money on—to meet the obligations of their mortgage?’ she said.
A report from the e61 Institute highlighted how these mounting challenges were pushing major life milestones further down the track for younger Australians.
‘Today's young Australians are navigating a different economic and social landscape than the generations before them,’ the report stated.
‘While young people always face a degree of precarity as they transition into adulthood, there are social and economic changes, as well as changing preferences, that are pushing key life milestones—like buying a home, moving out of the family home and starting a family further down the track.’
‘Today's 25 to 34-year-olds have a lower home ownership rate compared to their parents when they were the same age—with this disparity greater in capital cities.’
That disparity became even more stark for those who couldn’t lean on family for help.
As it turned out, the family home wasn’t just a house—it had become a powerful financial tool. And for some seniors, helping their adult children meant having to make a difficult decision of their own.
‘There's a lot of talk about getting some early inheritance from the Bank of Mum and Dad,’ Ms Baker said.
‘To me, this deposit for a house and buying a property, it's become the new private school.’
For those seniors who sold to help their children get a foot in the door, it often came at the expense of their own pension eligibility.
So while critics might’ve seen older Australians clinging to empty homes, the truth was far more complex. For many, it wasn’t just about staying comfortable—it was about staying afloat.
With so much pressure to downsize and help the next generation, would you be willing to sacrifice your pension to support your kids? Let us know your thoughts in the comments.
In a previous story, we looked at expert predictions around mortgage relief—and why some economists believed it was finally within reach.
For older Australians still helping their adult children with home loans or juggling property decisions of their own, any change in interest rates could have a big impact.
If property planning is on your mind, that story is worth a read too.
Read more: It’s 'all but certain’: Why some economists believe relief is finally coming for your mortgage
What seems like a simple decision about lifestyle and space is tangled up in complex financial realities and government rules.
As it turns out, staying put might not just be sentimental—it could be strategic.
Aussie seniors often find themselves under fire for staying in homes that appeared far too big for their needs—but a closer look revealed why many of them had no intention of moving.
Despite years of pressure to downsize, new data from the Regional Australia Institute showed that only 25 per cent of Australians aged 65 and over were willing to trade the city for a regional lifestyle. It was the lowest figure of any age group. In comparison, Millennials appeared far more open to a tree change, with 57 per cent expressing interest, followed by 37 per cent of Gen Xers.
On the surface, the financial appeal of selling up seemed obvious. Offloading a $2 million home in Sydney and buying a $1 million property in places like Port Macquarie or Coffs Harbour could leave retirees with a tidy $1 million in spare change. But that windfall came with a catch.
While the family home was exempt from the age pension assets test, anything left over—whether in cash or superannuation—was counted. That meant selling could backfire financially, potentially disqualifying a retiree from receiving a full or even partial pension.
Many seniors, aware of this, decided to stay put, even if their homes were emptier than ever. According to financial adviser and author Helen Baker, some only considered selling once their superannuation had dried up.
‘They usually only sell when they've run out of super and downsizing is their back-up option to release more cash,’ she explained.
In theory, retirees could invest their sale proceeds into super and generate an income stream through an annuity. But in reality, hanging onto the age pension came with a long list of perks—from help with electricity bills and medical costs to extra money for travel.
‘There are benefits in even getting a part age pension,’ Ms Baker said.
The Association of Super Funds of Australia estimated that a couple needed $73,875 annually for a comfortable retirement, which included the occasional overseas holiday. However, with access to a pension, Australians aged between 65 and 84 could feasibly live on $43,753 per year.
For many, the decision wasn’t just about downsizing—it was about survival. Meanwhile, the younger generations were struggling with a completely different housing dilemma.
Helen Baker, who founded On Your Own Two Feet, said younger Australians needed to consider teaming up with friends or siblings to get on the property ladder at all.
‘I think the problem for younger people now is they don't get in,’ she said.
With median house prices in capital cities sitting at $1.026 million, and the average full-time salary at $102,742, many banks were only lending up to 5.2 times a buyer’s pre-tax income. That left single buyers able to afford properties worth about $665,000—with a 20 per cent deposit. For those without help from the so-called Bank of Mum and Dad, the market was almost impossible to crack.
‘It's likely that property will continue to rise over the short-term, maybe, and even definitely the medium, long-term,’ Ms Baker added.
She noted that those in lower-paid professions such as nursing, aged care, teaching and childcare were finding it especially hard to buy.
‘The nurses, the teachers, aged care workers, childcare workers, hairdressers, for these people, it's incredibly difficult for them to purchase a property but those who are in more executive positions, or even tradies these days with what they're earning, they have more of an opportunity,’ she said.
But the cost of entry wasn’t the only barrier.
‘Are they willing to make the sacrifices in other things that they're spending their money on—to meet the obligations of their mortgage?’ she said.
A report from the e61 Institute highlighted how these mounting challenges were pushing major life milestones further down the track for younger Australians.
‘Today's young Australians are navigating a different economic and social landscape than the generations before them,’ the report stated.
‘While young people always face a degree of precarity as they transition into adulthood, there are social and economic changes, as well as changing preferences, that are pushing key life milestones—like buying a home, moving out of the family home and starting a family further down the track.’
‘Today's 25 to 34-year-olds have a lower home ownership rate compared to their parents when they were the same age—with this disparity greater in capital cities.’
That disparity became even more stark for those who couldn’t lean on family for help.
As it turned out, the family home wasn’t just a house—it had become a powerful financial tool. And for some seniors, helping their adult children meant having to make a difficult decision of their own.
‘There's a lot of talk about getting some early inheritance from the Bank of Mum and Dad,’ Ms Baker said.
‘To me, this deposit for a house and buying a property, it's become the new private school.’
For those seniors who sold to help their children get a foot in the door, it often came at the expense of their own pension eligibility.
So while critics might’ve seen older Australians clinging to empty homes, the truth was far more complex. For many, it wasn’t just about staying comfortable—it was about staying afloat.
With so much pressure to downsize and help the next generation, would you be willing to sacrifice your pension to support your kids? Let us know your thoughts in the comments.
In a previous story, we looked at expert predictions around mortgage relief—and why some economists believed it was finally within reach.
For older Australians still helping their adult children with home loans or juggling property decisions of their own, any change in interest rates could have a big impact.
If property planning is on your mind, that story is worth a read too.
Read more: It’s 'all but certain’: Why some economists believe relief is finally coming for your mortgage
