Australian homeowners, particularly those who are bearing the brunt of COVID-19’s economic impacts, need to reconsider the concept of shared living to dispel risks of losing their dwellings, says an expert.
Recent studies show that older Australians are working for longer to sustain their financial position and retain their homes. For instance, a report from the Brotherhood of St Laurence revealed that Australians aged 50 to 65 are struggling to hold onto their homes amid the pandemic. Furthermore, a recently-released PRD Research study showed that 40% of Australians considering shared living cite financial struggles as their main consideration.
Ian Ugarte, founder of Small is the New Big, said shared living continues to be a viable option for many Australians whose finances are affected by the economic impacts of the outbreak.
"With nearly half a million mature Australians already losing their jobs or having their hours cut as a result of COVID-19, it’s likely that a wave of older Australians will be unable to meet their home loan repayments and be forced to sell," he said.
Ugarte added: "Unfortunately, this coincides with the end of economic relief offered by financial institutions and the Federal Government, making their positions even more grim."
However, Ugarte believes there is a stigma in the concept of shared living, discouraging many Australians to even consider the option. He said this has paved the way for the evolution of the shared living concept to a co-living trend.
"Instead of the unappealing prospect of opening up your entire home to a complete stranger, ‘shared living’ can mean making a partial conversion to the existing family home to create an entirely separate living space – complete with its own bedroom, bathroom, living room and kitchenette for the newly acquired ‘tenant’," he said.
The co-living trend, Ugarte said, is a more adaptable housing strategy that will allow owners to expand their homes according to their needs. He said a partial conversion of the home to a co-living space can be completed in about two weeks, for a fraction of the cost of a full renovation.
"These costs easily recouped within the first year. Not only will homeowners have the benefits of an additional income stream to help service the loan, they retain all the trappings of their own home, including privacy and independence," he said.
The co-living trend is similar to the micro-apartment strategy Ugarte proposes. In an earlier report in Your Investment Property, Ugarte urged the Western Australian government to consider adopting a policy that would recognise micro-apartments as a viable investment strategy to help both investors and home seekers amid the COVID-19 outbreak.
"If government regulations made it easier for these investors to convert just one of their four-bedroom, two-bathroom investments into four micro-apartments, we could provide affordable homes," he said. "Not only would this stem the financial pain for many investors, it would also provide homes for some of the most vulnerable in our community."