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Downsizing cost trap awaits retirees – five reasons to be wary

Altmann, E (2017) Downsizing cost trap awaits retirees – five reasons to be wary. The Conversation.

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Abstract

It’s time to debunk the myth of zero housing costs in retirement if we want to understand why retirees resist downsizing. Retirees have at least five reasons to be wary of the costs of downsizing.
Because current data sets do not adequately take account of ongoing costs associated with apartment living, the effect of downsizing on individual households is masked.
Downsizing retirees into the apartment sector creates ongoing financial stress for older people. Creating tax incentives to move does not tackle these ongoing costs.
Centrelink payments for of $404 per week are well below the poverty line. Yet we expect retirees to willingly downsize and to be able to cede most of their Centrelink payments to cover high body corporate costs.
Requiring retirees to downsize for the greater urban good will shift poverty onto retirees who could barely manage in their previously owned standard suburban home.
Failing to understand the effect of high ongoing costs associated with apartment living and reinforcing the myth of zero housing costs in retirement will continue to lead to poor policy outcomes.

Item Type: Article
Keywords: Housing, Affordable housing, Retirees, Retirement income, Housing policy, age pension, Centrelink, downsizing, seniors, Affordable homes, Housing costs, apartments, strata title, termination
Journal or Publication Title: The Conversation
Publisher: The Conversation
Copyright Holders: The Conversation
Date Deposited: 23 Aug 2017 01:16
Last Modified: 29 Aug 2017 06:07
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