With the federal election on the horizon, the Retirement Living Council (RLC) is calling on major parties to adopt two targeted reforms that could unlock 59,576 homes for younger families by supporting older Australians to “rightsize” into age-friendly housing, the Property Council reported.
The recommendations are outlined in a new national report, “Removing Rightsizing Roadblocks”, which proposes removing key financial disincentives that currently discourage older homeowners from moving into more manageable homes in retirement communities.
“This election is an opportunity for the major parties to prioritise older Australians and fix a broken system to improve outcomes for everyone,” said RLC executive director Daniel Gannon (pictured).
With Australia striving to meet the Housing Australia Future Fund (HAFF) target of 1.2 million new homes by 2029, the RLC’s proposal presents a timely and practical strategy to help boost national housing supply.
RLC’s pre-election proposal highlighted two specific policy changes:
These changes, according to RLC, could encourage 94,000 older Australians to consider retirement village living and release nearly 60,000 larger homes—typically three- and four-bedroom houses in outer metro areas—back into the market for younger families.
Implementing the reforms could yield a number of significant national outcomes, the report stated:
“Prehistoric policies are locking older Australians in large family homes during a housing crisis when ‘rightsizing’ initiatives should be front and centre to ease pressure on housing and healthcare systems,” Gannon said.
The report noted that while capital city median house prices have risen nearly 600% between 1994 and 2024, Age Pension asset thresholds have only risen by 178% for singles and 193% for couples.
“Seismic shifts in housing markets and skyrocketing prices mean ‘asset rich, cash poor’ older Australians are actively punished for ‘rightsizing’ into more suitable housing as they free up equity,” Gannon said.
“Tens of thousands of older Australians are trapped in big and underutilised homes while young families are stuck in housing limbo. Frankly, it’s unconscionable.”
The report also underscored that there would be no anticipated cost to the government from the proposed Age Pension reform.
The CRA cap has not kept pace with rising house prices.
In 1997, it covered 55% of the median house price, but today it covers just 26%. If indexed, the cap would now sit at $550,000—the average cost of a two-bedroom retirement village unit—yet it remains at $252,000, the Property Council reported.
“Different people receive CRA based on different circumstances, and it even differs between housing types,” Gannon said. “For example, people who are on the Age Pension and live in land lease communities are eligible for rent assistance from the Commonwealth, regardless of purchase price.
“By contrast, retirement village residents who receive the Age Pension and pay more than $252,000 for their leasehold unit instantly lose their right to access CRA.
“This is another outdated policy that draws a line – and for no reason – between different seniors’ housing options that do the same thing in keeping people healthier and happier for longer.”
The joint report, developed in partnership with Ansell Strategic, highlighted how the proposed CRA change—estimated to cost $244 million annually—could alleviate pressure on the aged care system and public health infrastructure, while improving independence and wellbeing among older Australians.
Many of the areas identified for reform are local government areas (LGAs) with high concentrations of low-to-middle wealth seniors—those considered “asset rich-income poor”—who would benefit most from the changes, the Property Council reported.
