Australia’s aging population is sitting on a vast amount of underutilised housing stock — and new research suggests encouraging older Australians to downsize could be a critical lever in solving the nation’s housing shortage.
REA Group, in collaboration with GemLife, has released the realestate.com.au GemLife Downsizing Australia Report, which analysed the views of more than 2,000 property seekers, including Australians over 50 considering a downsize.
The findings shed light on both the motivations and the hesitations of older Australians who are weighing up their next housing move.
Spare bedrooms going unused
The research revealed a striking mismatch in how housing is used across generations.
More than four in five (85%) Australians aged 55 and over live in homes with two or more spare bedrooms.
By contrast, one-quarter of households aged 25–54 have no spare bedrooms, while 5% have too few rooms for their family size.
With more than one-third of Australia’s population projected to be aged 55 or older by 2050, experts say addressing this imbalance will be critical.
REA Group Senior Economist Angus Moore said the country’s housing mix has not kept pace with demographic change.
“Australia’s population is aging, with over one-third to be aged 55 or older in 2050,” Mr Moore said.
“As our demographic make up changes, so too will the types of housing we need. Older households are smaller, but much of our existing housing stock and the housing we build is still large, detached homes that may be better suited towards larger family households. Encouraging older and smaller households to downsize will be critical for ensuring we meet the needs of our aging population and use the housing we currently have more efficiently.”
Motivators — and barriers
The top motivators for downsizing were a desire for lower-maintenance living (34%) and retirement (29%).
Lifestyle also played a role, with a sea- or tree-change driving 11% of decisions.
Yet hesitations remain: 18% cited the hassle of moving, while 17% said the right-sized home simply wasn’t available.
GemLife Managing Director and Group CEO Adrian Puljich said more purpose-built solutions are needed to address these barriers.
“Many older people stay put simply because there is a lack of suitable housing for their over 50s and beyond, but struggle to maintain often large, ageing family homes,” he said.
“When there are appealing alternatives – and that means homes that are easy to look after, close to the people and places they love, and designed for how they live now, and will in the future – we see they are willing to downsize, and often wish they had done so sooner.”
Mr Puljich pointed to land lease communities as one of the fastest-growing housing types in Australia.
“Land lease communities are specifically designed for this demographic, with supporting facilities that promote wellbeing, connection and lifestyle and a financial model that helps free-up capital for retirement,” he said.
What downsizers want
The report found that 59% of older Australians would consider moving into an over-50s lifestyle or retirement community, with 17% saying they definitely would.
Downsizers also showed clear preferences when it comes to housing features and location:
- Bedrooms, garages and light: 72% want at least a certain number of bedrooms, 62% prioritise a garage, and 50% rate natural light as essential.
- Sustainability: 55% view solar and water systems as key property features, compared with 39% of all buyers.
- Healthcare access: Nearly half (47%) of downsizers prioritise proximity to medical and health services, compared with just 27% of all buyers.
- Lifestyle: Being close to the beach (22%) or bushland and national parks (23%) ranked highly for many respondents.
The bigger picture
Housing affordability remains a pressing national issue, with governments under pressure to boost supply.
Yet while much of the focus has been on building new homes, experts argue that unlocking under-utilised stock through downsizing could be an equally important solution.
The report suggests that encouraging more Australians to transition into housing that better suits their stage of life could free up family homes for younger generations — easing pressure in a market where demand continues to outstrip supply.
