Older Australians suffering from mortgage stress

Australia’s housing affordability crisis is now seriously hitting older people with barely half of those aged 55 to 64 having paid off their homes and people in retirement struggling to pay off their mortgages.

The Federal Treasury’s modelling chief, Phil Gallagher, told a recent Senate inquiry into housing affordability that the proportion of people aged 55 to 64 who fully owned their home had decreased from 72% to 54% while those still paying off their mortgages had doubled from 13% to 27%.

The inquiry was told that rising house prices were largely due to the gap between the supply of new houses now about 150,000 a year – and an underlying demand of between 180,000 and 190,000.

The latest Bureau of Statistics survey for 2005-06 housing costs found that even among people aged 65 to 74 the proportion of people fully owning their home had dropped from 81% to 75% in a decade.

Of all Australians aged 55 and over almost 10% were suffering ‘mortgage stress’ through having to pay more than 30% of their income in mortgage costs or rental payments.