HILDA Survey shows missing home by 40 linked to lifelong renting and weaker retirement prospects

Aussies who do not buy a home by age 40 are more likely to become lifelong renters and face greater retirement vulnerability, a landmark Household, Income and Labour Dynamics in Australia (HILDA) Survey finds. The long-running study, which has tracked about 17,000 Australians from the same households since 2001, provides a grim snapshot of how people are faring amid a housing and cost-of-living crisis.

Key findings show that ownership among retirees has eroded over two decades. The share of retirees who own their home outright declined from 75% in 2003 to 66% in 2023, while those living in private rentals rose from 6% to 12% in the same period. If current trends continue, about 24% of retirees could be renters by 2043. Dr Kyle Peyton, a senior research fellow at Melbourne University's Faculty of Business and Economics and a co-author of the HILDA report, cautioned that these disparities are likely to grow as younger Australians face declining homeownership and retirement security becomes increasingly tied to superannuation. "Looking ahead, these disparities are likely to grow, as declining homeownership among younger Australians makes retirement without housing wealth increasingly common - placing even greater importance on the role of superannuation in ensuring retirement security," he wrote.

Renters in retirement tend to have lower and less stable incomes and higher housing costs relative to income. In 2023, almost 59% of retirees who rented had less than $100,000 in superannuation, compared with 26% of homeowners. A further 25% of retirees in private rentals had no superannuation at all, underscoring the gap in housing wealth as a factor in retirement security. "These disparities in wealth at retirement are therefore not simply a reflection of housing choices but are indicative of broader economic inequalities," Peyton said.

Policy and market dynamics are intensifying the pressures identified by HILDA. About 170,000 new homes are built each year, well below the National Housing Accord objective of 240,000 as part of a federal plan to build 1.2 million homes by 2029. Property prices have risen by more than 400%, outpacing wage growth, and demand remains strong. The government has expanded the home guarantee scheme to October 1, allowing first-home buyers to purchase with a five per cent deposit, a move that could reshape affordability for new entrants.

Dr Peyton noted that younger generations—especially first-generation immigrants and others without intergenerational housing wealth—are finding it increasingly difficult to enter the housing market. If current trends continue, these younger cohorts may spend most or all of their working lives renting. Older retirees who did own homes benefited from decades of affordability when entering the market and paying off mortgages earlier; younger cohorts face longer trajectories to ownership or continued renting, a dynamic that could reshape retirement outcomes for decades. With housing wealth already a crucial component of retirement security, the report suggests a growing emphasis on superannuation policy to bridge the gap for those who rent.

As Australia grapples with a persistent housing crisis, the HILDA findings add to the policy debate surrounding affordability, housing supply, and retirement readiness. The study underscores the importance of aligning housing policy with retirement security, especially for cohorts currently entering or nearing retirement who have not benefited from decades of price growth and capital gains in housing. The dynamics point to an economy where housing costs continue to influence consumption and savings patterns for years to come.