The generational shift set to alter the property market: Club Plus Super

A generational shift may be coming that will substantially alter the property market, according to Club Plus Super. But what that shift is may catch you off guard.

Club Plus Super’s chief executive officer Paul Cahill says that the current structure of superannuation will see many Australians forced to sell the family home to fund their retirement – and move in with their children.

Modelling undertaken by the company has shown that a 65 year old person’s super balance will likely be dried up after just six years in retirement.

This matches an Association of Superannuation Funds of Australia report that saw the majority of Australians relying on modest levels of superannuation, with many retirees relying on the Age Pension. A Club Plus Super survey also discovered that while more than 50% of the 843 respondents understood the funds needed to retire, just one third were making extra contributions.

“This system and the sheer scale of Australia’s rapidly aging population will potentially see hundreds of thousands of retirees run out of funds and not be able to enjoy the retirement they envisaged,” said Cahill.

What will then potentially be seen is a system where retirees sell their large properties, unlock equity and then either rent, downsize or move in with their children.

“These trends could significantly change the dynamics of Australian families, the Australian property market and the Australian economy,” he said, pointing to moving in with children as the most cost effective option for many retirees.

He says that either Australians need to make additional contributions to grow their superannuation, or the government need to overhaul the system.