Mortgage Debt Causing Mental Health Issues in Older Australians


A new study by the Australian Housing and
Urban Research Institute (AHURI) titled, ‘Mortgage stress and precarious home ownership: implications
for older Australians’, shows that the burden of mortgage debt is leading to worsening mental
health outcomes for older Australians. Along with decades of increasing house prices
comes decades of increasing household debt. Although the property market has been falling
in recent times, obviously, the debt remains. Unfortunately, the Australian population is
ageing. This graph shows the demographic projections
by age range of seniors, 2016 to 2031. Due to lower birth rates and higher standards
of healthcare, the proportion of older Australians is steadily increasing. The study found that since the late 1980s,
mortgage debt for older Australians has blown out by 600%. Real house growth lagged behind only increasing
by threefold over the same period, while incomes have only doubled. Older Australians’ mortgage debt to income
ratio has tripled from 71% to 211%. This increases the likelihood of repayment
risk and mortgage payment difficulties. Mortgage payment difficulties lead to decreased
mental health scores for both males and females — females more than males. The study also showed that psychological distress
scores went up for men facing late mortgage payments. But one statistic I found particularly worrying
is that with current trends, over half of all 55-64 year-olds will still be paying off
a mortgage in 2031. This is up from 36% in 2016. Only 23% will own their home outright. That’s pretty disturbing. Curtin University’s Rachel Ong, lead author
of the study, commented on the findings. “These statistics are quite shocking. More and more older Australians are finding
it increasingly difficult to pay off their mortgage debt before they retire. Our research shows that if you are carrying
a mortgage debt and having difficulty repaying it in later life, then your mental health
is likely to be poorer than someone who does not have this issue.” 69-year-old Beverley Baker, chair of the Older
Women’s Network of NSW, is one of the growing number of older Australians who are still
paying off their mortgage. In her role, she meets many older ladies who,
due to relationship breakdowns, are struggling to pay back the mortgage. She said, “It’s depression. If you ask anybody, they’re depressed. There has to be better ideas than this hard
mortgage grab… buy sell, buy sell culture that we are in. A home is not an asset — a home is a need. You know you have wants and needs? It’s a need.” Ms Baker had to get a mortgage in her 50s
due to a relationship breakdown. She commented on these pressures. “I still have eight years to go on my mortgage. Fortunately, I have a job that I love and
a board that still likes me and is happy to have me work for them. Taking a mortgage on at 52, it’s a different
ballgame. I’m not expected to work until I am 77, but
that’s the reality — I have to work until I am 77.” The study also found that by 2031, there will
be a 60% increase in demand for Commonwealth Rent Assistance, increasing the budget cost
from $972 million in 2016, to $1.55 billion in 2031. For people aged 55 and over, the unmet demand
for public housing is expected to rise by 78%. Rachel Ong commented, “Governments can expect that will create
quite a lot of pressure in terms of the amount of funds that they will have to divert to
the aged pension system. When I saw these numbers, I actually felt
quite insecure myself. I felt insecure about my future, because like
many other Australians, I am someone who would be looking at carrying mortgage debt for quite
a long time yet.” Ms Baker pondered on what would happen if
she could no longer work and had to sell her house. She said, “Yes, I would get a lot more than I paid
for it, but that doesn’t give me a home, and it doesn’t ensure that I could replace my
house if I could no longer work and couldn’t pay the mortgage. Where I live, I would never be able to stay
there — to have my friends around me; to have easy access to the train station — I’m
two minutes from the station. Those things are really important as you get
older in life.” What are your thoughts on this new study? Are house prices increasingly hurting our
elderly citizens? Or are house prices just hurting everybody? Have we let greed rule the roost in Australia
and stuff anybody who dares question the status quo? Has Australia just become a greedy and mean
society?

Paul Whisler

26 Comments

  1. When it was young people effected by unemployment, the line was dole bludgers. What do they want from me, now they are an issue?

  2. Place the superannuation into you principle place of residence and capped tax benefits

  3. Aren’t these the same group of people who have had unprecedented growth, opportunity and public funded everything and now still complain they can’t get ahead. Excuse me. I note you don’t undertake any analysis on personal choice or decisions made by individuals, how about being balanced.

  4. The older people may think they got it bad but doesn't hold a candle to what young people are having to live with who are basically futureless and it only gets worse from there. The next decade is going to marked by rising suicide rates for the young as reality sinks in that they are only going to have shit lives.

  5. why is the old hag winging? Im told I have to work till im 78 poor old hag why should I care

  6. If the government want to increase revenue its simple. Remove franking credits, remove negative gearing, remove capital gains discounts.

  7. Shocking findings…however i find that many Australians are simply not prepared to face the consequences of unaffordable luxuries like foreign travel. One of my friends monthly plan is to pay the credit card interest only (no consideration whatsoever for paying the principal loan) and recently he planned a holiday trip to europe by calculating how much additional interest he had to pay once he took additional credit card loan for the trip. Its like a death spiral…and this is continuing for past several years. Logic of any kind does not penetrate here and the consequences follow naturally. Sad.

  8. Am I supposed to feel bad for them? Millennials have been fucked over with house prices and employment opportunities and no one cares less. I'm not about to shed a tear for any baby boomers out there.

  9. Time that this structured greed driven debt fueled ponzi system housing bubble collapsed instead of propping up housing prices the old are working till they die the young cant get in and the middle are trapped in high mortgages with negative equity. Cumulative years of policy settings are the cause to this effect.

  10. Maybe they should do what they have been telling millennials to do for years – move 50km from the city centre in a house sardined up against other houses. The mortgage won't be so big.

  11. This is modern day slavery. Before the slave Masters and fief Lord's had to house, clothe and feed you. A few hundred years ago they realised its cheaper to give peasants "freedom" and let them pay for their own upkeep

  12. Everyone is suffering & when it all comes crashing down the battlers will suffer the most, love your vids mate keep up the great work

  13. So now after listening to them bitch about how lazy & entitled we millennials supposedly are, we're going to have to carry them at far higher rates than they did their parents? Sounds grand.

  14. So even the boomers that seemingly benefited from the ponzi scheme/bubble are suffering; well done Australia!

  15. Basically the housing market in Australia has been allowed to run amok too long. It's unregulated, it's the reason millennials are copping flak for refusing to get into the market, because it doesn't make sense to own. It's hard for everyone, and when it gets that bad of course the most vulnerable will be the first to fall. But it's worse than just not being able to buy a house without ever being able to pay it off, the average rent cost has also skyrocketed, the quality of new homes being built is an absolute joke and yet again, those most vulnerable that shouldn't have to deal with problems they had no choice in making are left to pick up the bill and have their lives shattered. How can we call ourselves the lucky country when the vast majority of our population are pulling their hair out over the cost of living? Isn't it a basic human right to have affordable and decent housing, and if not, why not?
    Edit: I mean, this IS supposed to be a first world country yeah?

  16. I'm sorry, but anyone hitting 60 in Australia who doesn't own there own home outright, gets no sympathy from me. Millennials have been completely shafted in comparison to the cheap housing, free education, job security and great savings rates you guys got………go fuck yourself.

  17. “The true measure of any society can be found in how it treats its most vulnerable members.” —Mahatma Gandhi

  18. Noone talks about property investor lifestyles. My observation shows appalling picture of underfeed and robbed of any human dignity. Is such life even worth living ?

    There ale exceptions but

  19. Don't worry apparently Chinese tourists via Jawa have indicated they are coming to Australia to buy housing in droves staring very soon so housing will be too expensive to even get a mortgage if your Australian – problem solved no mortgage – no house – no debt.

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