Fix housing to improve aged care budget

Older people want to stay at home as they age, with many wanting to stay in the home they have lived in most of their lives. 

But the reality of this statement is that many of the homes built throughout the 20th century are not suitable for older people living alone as their bodies fail and their faculties decline.  

Yes, we can modify homes to be more age-friendly, but that comes at a cost and doesn’t address the other elephant in the room: the ongoing cost of maintaining a home. 

The entry level Commonwealth Home Support Program (CHSP) and the higher-level Support at Home programmes provide funding to support someone to maintain their home, to keep them out of residential care. 

Billions of dollars are spent on subsidies for gardening and cleaning in recognition that these activities get harder as you get older. Fair enough.  

Between CHSP and Home Care we spend about $4.4 billion (28% of total spending) on cleaning and home maintenance activities. Funding for home modifications is also available, but the annual cost of the new scheme isn’t public knowledge. 

But is this the best and most cost-effective way to support ageing in place? Surely, these year-to-year costs would be less if people were in smaller age-friendly homes; but these homes do not exist. 

No one is suggesting that we force people to downsize their home, absolutely not! But for those who might want to downsize, the options are limited. Why?

Keep reading to complete our reader poll at the end of this article.

The housing market has failed older people too 

Almost every day in the media is another story about the failure of the housing market. Young people are increasingly locked out of a market and seniors are partly blamed. 

Yet there is little said about the failure of the market for seniors. 

While most older people are lucky enough to have homes, many don’t have options to change their housing, even if they want to. 

Seniors friendly housing is limited, unattractive, or heavily focused on people with wealth. 

It’s a problem with the whole market. 

According to the ABS, average loan sizes for owner occupier dwellings increased from $400,000 to $500,000 from 2016 to 2021 but have increased from $500,000 to $735,000 between 2021 and 2026 (more than double the increase over a similar 5-year period). 

Data suggests this has something to do with the cost of materials which increased by 50% only a few years ago. The graph below shows the magnitude of this increase – and no, your eyes are not playing tricks on you – it was massive! 

Developers and builders, and who could blame them, are focusing on maximising their profit margin, at a time that the cost of materials have quickly travelled north. 

If you are a pensioner, living in the middle to outer suburbs with limited savings, you are not going to downsize, because there isn’t anything suitable that is affordable and no one is building anything like this. 

Even those with modest wealth will baulk at paying millions for an apartment near the inner city or in new home in a cooker cutter lifestyle village where you own the house but not the land. 

Sure, there are some older retirement villages that still have lower entry costs, but these are not always attractive and come with a buyer beware warning (as NSA has consistently argued). 

So, rationally, people choose by default to stay put. And who can blame them? 

Leaving housing to “the market” has failed both young people and older people. 

This brings us back to the aged care budget. 

Aged care fail 

If older people remain in larger homes that are not age friendly and require significant cost to maintain, then that raises the cost to the government. 

While the government has introduced greater co-contributions for “everyday living” services, such as gardening and house cleaning, that is just pushing the cost somewhere else. It’s now the individual’s problem, but the individual doesn’t have control over the housing market. 

It would be far smarter if government recognised the benefits of promoting the construction of seniors-friendly housing that is modest but attractive to the hundreds of thousands of seniors who don’t have large wealth (that’s most retirees BTW). 

The first step is understanding what older people want and then creating policies and incentives to ensure this type of housing gets built. 

NSA wants older people to be part of this conversation about seniors housing.  

Join our Better Housing campaign for regular updates and to have your voice heard on how we create housing that meets the needs of seniors and the wider community.