A new white paper by Retail Employees Superannuation Trust (REST) Industry Super has found that many Australians are abandoning the dream of owning their own home, predicting that 25% of Australians may not own their own home when they retire in 25-35 years compared to 15% today.


With declining home ownership rates, superannuation is set to become the biggest investment for most Australians.


The Home Ownership and Superannuation White Paper examines how, with many Australians choosing not to, or unable to enter into home ownership, buying property will no longer be the largest investment they make in their lifetime.


Currently, 15 per cent of Australian retirees do not own their own home. In the next five to 15 years there will be closer to 20 per cent of individuals retiring without owning their own homes, while in 15-25 years time this is likely to have risen to about 25 per cent.


REST Industry Super CEO, Damian Hill said in light of this decline and superannuation increasingly becoming the biggest financial decision a person will make, an attitude shift is required to apply the same level of attention to our retirement nest-eggs as we previously would have to purchasing a property.  


“Historically, home ownership rates in Australia have been very high; around 80 per cent by retirement age. However the home ownership rate for those under 35 is less than half this and is in serious decline. In the last financial year alone, the number of first home buyers in Australia declined from 190,000 to just 90,000.


“While some young Australians are consciously deciding not to purchase property, many others want to buy a home but are unable to because of the reduced affordability of housing, especially in the capital cities.


“The problem with this is that so much financial advice and policy has been developed around the assumption that people will own their home when they retire. While home ownership has long been one of the key pillars of Australia’s retirement income policy, it is certainly showing signs of crumbling,” Mr Hill said.


“This means it is essential that the other pillars, such as savings and superannuation, are strengthened to ensure Australians have adequate retirement incomes in the future.”   


In response to the findings of the white paper, REST Industry Super is calling on five key groups to shift their views and attitudes on the interaction between home ownership and superannuation – individuals, financial advisers, media, government and superannuation funds.

  • Individuals need to be focused on their superannuation during their whole working life, not just a few years out from retirement. Without additional retirement savings – including superannuation savings beyond the compulsory guarantee – non-home owners face both a smaller retirement income pool and higher post-retirement costs via rent
  • Financial planners need to be aware of this declining home ownership rate when discussing financial options with clients
  • The media needs to be conscious that commentary given around financial options needs to increasingly consider that many people will not own their home when they retire
  • Government need to re-examine the adequacy of retirement incomes in light of declining home ownership rates. Government also has a role in increasing community understanding of superannuation to ensure individuals can make informed decisions about the most important financial asset they will ever own. Policies also need to take into account the reluctance of some retirees to sell their homes to fund their retirement
  • Superannuation funds also have an important responsibility in educating their members about making the most of their retirement nest-egg. While some funds, including REST Industry Super, do have programs in place to educate their members on a variety of super-related topics, as an industry we must do everything we can to ensure we continue to talk as simply and regularly as possible to our members and the public at large about the importance of super


The REST Home Ownership and Superannuation White Paper is available here.