Housing wealth as retirement saving: Does the Australian Model Lead to Over-Consumption of Housing?

Bruce Bradbury

No 7, LWS Working papers from LIS Cross-National Data Center in Luxembourg

Abstract: Owner-occupied housing has long been seen as a key pillar of retirement saving in Australia. The Australian elderly receive a relatively small amount of their income from occupational pensions, have high home ownership and private saving, and Australia is particularly unusual in that the majority of the aged population receive an income and assets-tested aged pension (which excludes the owner-occupied home). Does this model contribute to making the Australian elderly asset rich but income poor? How does pattern of housing wealth accumulation in Australia compare with that in other countries? This paper examines these questions using data from eight countries in the Luxembourg Wealth Study together with comparable Australian household survey data. Australian income and housing wealth patterns in retirement are very different to those of the other eight countries. After retirement, incomes fall more steeply and housing wealth is higher. Even though housing consumption as a share of total consumption increases after retirement in all countries, this increase is particularly steep in Australia (and possibly the US).

Pages: 40 pages
Date: 2008-10
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:lis:lwswps:7

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