The current Australian housing market is showing a steep decline in new listings as property owners hold on to their existing properties. Figures from realtors show a drop of 18.8% in the last 12 months, which can place the housing market under quite a bit of pressure. But in the midst of all of the turmoil, someone is winning, and that someone is the homeowner holding on to their property with the hopes of building up a retirement income in a far less volatile retirement landscape. 
 

Retirement Savings Locked Into Property

While saving for retirement seems like a contemptuous topic, market analysts seem quite at ease with the fact that property owners are banking on their properties as a sustainable retirement income. According to those professionals, it works as a double bonus for the Australian economy. The first is that there are sufficient rental properties for those who need them, and the second is that fewer retirees rely on the state to support them. For homeowners who happen to have property in prime locations, the possibility of stable tenancy is high, which affords a steady income.
 

Sydney And Melbourne Drop Prices, But Is This Good For Retirement?

A weaker market might spur those on the brink of retirement to take their package sooner to capitalize on the more affordable properties. Those on the cusp of retirement might find the falling house prices in two of Australia’s property hot spots too good to resist. This is because they would want to get in before first-time homeowners have the opportunity to purchase their own properties. Secondly, retirees are facing stiff competition from investors. The weaker property prices mean that homeowners are a little more reluctant to let the properties go, and banks are less likely to grant loans in weaker markets. However, those who are cash flush have the upper hand. 
 

It Only Works When The Mortgage Is Minimal Or Paid Off

Those who are banking on their property as a means of retirement income, will soon find themselves struggling to make ends meet if the rental income is meant as a means to pay off the mortgage. By the time homeowners reach retirement, the property should already be mortgage free in order to make the transition a little easier. It’s also important to not tap into the equity of the property close to retirement, as it could just increase the mortgage all over again.
 

For Australians, paying off a mortgage has become a means of financing their retirement. The home loan is fast becoming the de facto savings plan for those who don’t have much disposable income.