Finding the Best Fit: Intentions, Expectations & Practicalities of Downsizing

Transcription

1 Finding the Best Fit: Intentions, Expectations & Practicalities of Downsizing Kay Saville-Smith, Programme Leader Finding the Best Fit: Housing, Downsizing & Older People in a Changing Society 1 July 2015

2 Intentions & Expectations Survey of 615 older people living in retirement villages Survey of 435 older people who are staying in place Survey of 115 older people who moved one of whom actually moved to a retirement village.

3 RVS and Movers Profiles Age 84.2% > 74 years RV residents 25.2% > 74 years - Movers Drivers license 79.3% - RV residents 95.7% - Movers Disability 59.5% - RV residents with some sort of disability 47.8% - Movers with some sort of disability

4 Movers to Retirement Villages 83.3% did not consider another option Health services proximity 29.4% Security and safety 26.2% Low home maintenance 21.3% Aged care services proximity 18.9% Low section maintenance 15.1% Smaller home 14% Companionship 10.7% More accessible home 10.4%

5 Retirement Village Residents The equity released from selling up and moving to a retirement village can be small Those moving to retirement villages fall into four categories: De-managing Smaller dwelling Functional dwellings Securing the future

6 115 Movers Want Smaller homes 30.4% Low section maintenance 27.8% More accessible home 27% Low home maintenance 23.5% 13.9% considered a retirement village

7 Why Not a Retirement Village? I m 92 and I don t feel old enough Retirement villages = frailty Generational mix is desired Animal issue Proximity anxieties Service costs Tenure and sale issues

8 So What About Stock?

9 So What About Stock?

10 Size by Household Size

11 Releasing Equity RV Residents Retirement Village Residents 17.2% wanted equity release

12 Releasing Equity - Movers (n=88) Other Older Movers 20.9% wanted equity release OM Equity Number Percent Less than $25k % $25k - < $50k % $50k - < $75k 5 5.7% $75k - < $100k 5 5.7% $100k or more %

13 Equity Release 100% 90% 80% 70% 60% 50% 40% 30% $100k or more $75k-<$100k $50k-<$75k $25-<$50k Less than $25k 20% 10% 0% RV Residents Other Older Movers

14 Sources of Income RV Residents Other Older Movers Self-Employment Other Paid Work Other Super/Pensions/Annuities Interest, Dvidends, Rents etc NZ Super

15 Tenure Prior to Moving 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other Older Movers RV Residents Other 8 31 Tenant Owner-occupier

16 Movers Purchase by Sale Price 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Less than $100,000 $100,000 - $199,000 $200,000 - $299,000 $300,000 - $399,000 $400,000 - $499,000 $500,000 - $599,000 $600,000 - $699,000 $700,000 or more Paid Less Same Paid More

17 Finding the Best Fit: Housing Downsizing and Older People in a Changing Society. House Price Dynamics Professor Laurence Murphy & Dr Michael Rehm Department of Property, University of Auckland Tuesday 7 July 2015

18 From Home to Financial Asset Owner-occupation has assumed an important position in housing systems in a number of countries - Ontological Security (?) -Favoured policy position -Liberalisation of mortgage markets Homeownership & Ageing Consumption of housing services (reduced poverty in old age) & financial asset (the potential to extract equity)

19 Issues Homeownership & Asset based welfare Traditional Welfare Systems challenged by expected Ageing Population Policy makers considering new welfare models Asset Based Welfare Citizen as actuarial subject assessing lifetime risks over lifecourse (Homeownership as financial asset & Possible pension) Housing as a pension: A Problematic Narrative Homeownership- Fragmented and Differentiated Increased dynamics of liberalised mortgage markets promoting HEW and extending debt into old age

20 Ageing and Downsizing a decrease in dwelling size (i.e. number of rooms and/or spatial dimensions), and/or garden/yard area and or monetary value (Judd et al 2014.p1). Possible Movements Property Large to small house (+ equity release) Large to large house (+ equity release) move to different housing market Tenure HO to HO, HO to Rental or License to occupy Research Decision-making process & Financial Scenarios

21 NZ Issues Home Ownership major tenure but declining 1991 = 74% 2006 = 66.9% 2013 = 64.8% Housing the major component of Household wealth RBNZ (2012) FSR

22 Releasing Housing Wealth? 1990= $123bn 2000= $229bn 2010= $609bn 2013= $719bn 2014= $768bn RBNZ 2015 (

23 National House Price Appreciation Spatial Patterns Regional Housing Typologies Submarket Case Studies

24 The Geography of House Prices Simple First-cut at mapping price dynamics Median house price data Purchase price expressed in 2013 dollars (real gain)

25 First Cut: Median House Prices Real House Price Appreciation Low capital growth widespread High growth concentrated in key markets

26 Auckland Considerable intra-urban variation Implications: Variation in Equity release potential & possible Downsizing strategies

27 National House Price Appreciation Spatial Patterns Regional Housing Typologies Submarket Case Studies

28 Regional House Price Typologies Prices graphically depicted to identify patterns Median house price data Purchase prices expressed in 2013 dollars (real)

29 Housing Market Typologies Rural Areas Step-Change Small Cities Steady Appreciation Large Cities

30 National House Price Appreciation Spatial Patterns Regional Housing Typologies Submarket Case Studies

31 Submarket-level Price Appreciation Capital gains determined at individual property level Paired house price data & Purchase prices expressed in 2013 dollars (real gain) Real Capital Gain/Loss Address Floor area Land area Cladding Condition Vintage

32 Submarket case studies identified (33 in total)

33 Capital gains experienced by individual properties Petone Residential Dwellings Petone Residential Flats/Apts Mean $193k Mean $66k

34 Mean $167k Tauranga City Excl Mt Maunganui Residential Dwellings Mean $119k Tauranga City Excl Mt Maunganui Residential Flats/Apts Some local data Mean $313k Mt Maunganui Residential Dwellings Mean $182k Mt Maunganui Residential Flats/Apts

35 Preliminary Analysis of Housing Stock Source: NZ Census 2013 Prelim Analysis of Housing Stock

36 Prelim Analysis of Housing Stock Source: NZ Census 2001 & 2013

37 Conclusions Emerging Dynamics i) in Housing and Welfare Systems (Wealth/Equity Release/Pension processes) ii) in opportunities for housing downsizing House Price dynamics shape individual household s opportunity space Need to examine the impacts of housing markets (sub-markets) on households downsizing decisions & opportunities.

38 Case Studies and Preliminary Findings Bev James, Public Policy & Research Tauranga Presentation 7 July 2015

39 The Case Studies Understanding older people s housing: Housing experiences and needs Housing choices Circumstances that prompt or inhibit downsizing Local and regional differences

40 Case study areas Top of the South Marlborough, Nelson Bay of Plenty Tauranga, Kawerau Wellington Hawkes Bay Māori Older people affected by leaky building syndrome

41 Interviews with older residents Aged 55+ Those who have downsized Those considering downsizing Those aged 75+ who have not downsized

42 Interviews with Service Providers Providers of services for older people, e.g. health services, MSD, home support services, churches Age Concern and Grey Power Councils Lawyers Property managers, landlords, housing providers Building companies, real estate agents Financial services, e.g. banks, Budget Advice

43 Meaning of downsizing Moving from larger to smaller dwelling and/or section Having less to worry about Reducing consumption Divesting possessions Changing lifestyle Pressure to downsize When to downsize

44 It means we can afford to live a bit longer! Rather than wait until one falls off the perch, we want to find somewhere suitable for us both. We're getting rid of things we don't want so the one left doesn't have to do it. Spend some money on ourselves, don't leave it too long. We want to have a little bit aside so if we want to take off for trips, we are able to.

45 Downsizers are looking for Warmth Independence Maintenance-free home and section Cheaper running costs utilities, rates, insurance, maintenance, transport Handy to services Some space An outlook

46 Information needs Strong reliance on getting information and advice from family and friends Strong reliance on own knowledge and experience Almost no use of professionals for advice It s hard to find information Internet use either nil or a lot Reluctance to seek advice Seeking advice indicates failure and dependence

47 Barriers Very few housing options Dominance of larger homes in the market limitations on building/ buying /renting smaller homes Cheaper options may be in undesirable areas Financial constraints on changing housing Houses not designed for older people s needs and preferences

48 Has downsizing worked? Often moving when other life changes happening, so impacts are difficult to separate e.g. retirement, health problems, loss of partner Downsizing can increase costs; and there are some unexpected costs Divesting possessions both good and bad experiences

49 Similar issues for older rural dwellers Lack of information and advice on housing options Lack of age-appropriate, affordable dwellings Financial constraints

50 Housing issues for older rural dwellers Expectation that older people will move away Downsizing is often tied up with farm succession Costs of repairs and maintenance of home and infrastructure higher Interest in more housing around existing settlements Competition from 2 nd home owners

51 Service issues for older rural dwellers Few or limited services and problems of critical mass: Home support options and workers Health care Rest home and respite care Social, companionship Smaller volunteer pool and difficulties in recruiting Loss of ability to drive is key decider to move

52 Virtual Village Potential for people in smaller settlements to set up their own support networks? Keep living in your home and neighbourhood Services - social, recreational, educational, repairs, care, transport, utilities minder, insurance Link to existing services and/or develop new services