Seniors downsizing could solve housing crisis, experts say

Seniors are being urged to downsize to free up larger multi-bedroom homes as a potential solution to Australia's housing crisis.

Many retirees, however, say they are put off by the daunting administration, up front costs and are unwilling to leave the home they have lived in for decades.

"It's quite a complicated process and we do need to make it simpler," Downsizing economist Michael Blythe said.

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"We talk about a housing shortage in Australia, but what economists will tell you is we've got an excess of bedrooms, just not in the right place...maybe instead of first home buyers, we should be thinking about last home buyers."

Data shows that one-third of the baby boomer generation feels as though their homes are too big for them, including Ros and Ken Vaughn, aged 73 and 80.

"It wasn't an easy decision initially, but then I saw Ken up on the roof - the maintenance on this house was beginning to show," Ros Vaughan said.

"We knew we had to find the right place for us, while we were fit enough to do it."

The couple have lived in their Carrs Park family home for 38 years, but recently decided to move into Oasis Apartments in Peakhurst.

While downsizing is a good option, Blythe says the lengthy process could be an obstacle, as well as freeing up the equity.

"They're asset-rich but cash-poor, and we need to find some way to rationalise that," he said.

"We need to find a way to generate income for this group and get them into dwellings."

Super benefits are one-way retirees can get around downsizing.

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The Downsizer Contribution Scheme means anyone over 55 can send $300,000 from the sale of their home straight into their super account.

"One of the hidden secrets of downsizing given the returns super funds generate, the average downsizer is looking at an extra $20,000."

Online platform downsizer.com is also offering a solution for those looking to move to a smaller property.

"It's essentially a deposit bond, so it's not like a reverse mortgage, it's not like bridging loans - all of which are quite expensive," Blythe said.

Downsizing.com.au also provides a comparative tool that lets users compare available properties.

"There's mostly independent living (properties), there's retirement villages, there are land lease communities," Amanda Graham, downsizing.com.au CEO said.

"Obviously people are very emotionally attached to their home, (but) it can free people up to have the sort of lifestyle that they want."