Declining home ownership rates highlight the importance of Australians taking action to boost their retirement savings sooner, according to REST Industry Super.
Currently just 15 per cent of retirees do not own their own home, but in the next five to 15 years, 20 per cent of individuals will be retiring without owning their own home, and in 15 to 25 years’ time that is likely to have risen to about 25 per cent, according to the ‘Home Ownership and Superannuation’ white paper, commissioned by REST Industry Super and authored by Louise Southall from The Right Research in May 2011.
Home ownership rates for people under 35 have fallen from 45 per cent in 1995-96 to 37 per cent in the most recent figures from 2007-08, and if they have continued declining at this pace they may have dropped as low as one in three by now, the paper stated.
REST Industry Super chief executive Damian Hill (pictured) said the finding had implications for policy makers, super funds, planners and individuals, because an increased portion of people’s retirement benefits will be needed to pay off mortgages.
Individuals will need to start showing an interest in their superannuation earlier, through strategies such as making extra contributions or changing their investments options, he said.
“[Buying a home] is a huge commitment and it’s not getting easier. People need to have fallback plans, and think about if it doesn’t come off or if you need to use some retirement savings to pay off debt,” he said.
The research also highlights the importance of raising the superannuation guarantee from nine to 12 per cent, he added.
