Booming house prices may see more people aged 60-65 retire later this year

Australian house prices have grown by 22.1 per cent over the past year, a growth rate not seen in this country for more than three decades.

And incoming changes to superannuation will now make it easier to retire earlier too.

People aged 60-65, will for the first time be able to boost their superannuation balance by using the money from the sale of their home from 1 July 2022, which potentially allows them to bring forward their retirement.

Announced in last year’s Federal Budget, eligible individuals aged 60 years or older can choose to make a contribution into their superannuation of up to $300,000 per person ($600,000 per couple) from the proceeds of selling their home starting from 1 July. This was previously only available for Australians aged 65 and above.

Treasurer Josh Frydenberg revealed that, from 1 July 2018 to the end of January 2022, 36,800 individuals aged 65 and over have contributed $8.9 billion to their superannuation under this legislation, an average contribution of about $241,000.

“(The legislative change) will allow more older Australians to consider downsizing to homes that better meet their needs, increasing the supply of larger homes for young families,” he said.

 

Raine & Horne executive chairperson Angus Raine (photo above) said empty nesters are already cashing in on the record house prices.

“The strong returns produced by property markets around Australia have clearly provided empty nesters with the incentive to make a move,” he said.

Downsizers realise they must sell up to capitalise on this terrific growth probably even more than other vendors.

“I have never seen in my 35 years in real estate more properties selling for the first time in 40, 50, 60 and even 80 years,” he said.

Looks like there are going to be a lot of new faces in retirement villages.