Downsizing property among the older generation

a means to free up New Zealand’s housing stock

Abstract

New Zealand experiences widespread intergenerational housing inequalities. Millennials are far less likely than previous cohorts to access affordable housing and to own property. Large dwellings which are often more suited to young and expanding families are arguably underutilised by the older generation. Retirees are living longer and often stay in homes that they have lived in for most of their lives. This is exacerbated by distortions in our tax system which leave owner-occupied housing free from a capital gains tax. One way to phase out this generational discrepancy is motivating older generations to move to smaller homes towards the end of their life cycle. This would free up larger properties for first home buyers and ensure that retirees live in more suitable dwellings.