Australia has 13 million guest rooms. Is there a better use for them?

“Tax on [property] turnover means people are in homes that are not suitable for their situation. So we would get a better distribution of houses if we replaced the stamp duty with a property tax,” Tulip said.

Other measures to encourage empty nests to downsize included building more diverse property types and removing the exemption for family homes from the aged retirement asset test, he said.

Two-thirds of spare rooms are in couple-only or single-person households, and most of them own their homes.Credit:iStock

“They have spent the last 20 or 30 years opposing the construction of new apartments, townhouses or retirement homes in their suburbs. Thus, most Sydney suburbs lack a diversity of housing types that would allow people to move to more suitable housing, while maintaining their social networks.

“They want to move somewhere nearby, but they’ve blocked out all the housing alternatives that would give them that option.

“The exemption of the family home from the old-age pension criterion also aggravates this situation. [spare bedrooms and empty nests]. It should be removed.


Impact Economics and Policy chief economist Angela Jackson said there was a clear mismatch between homes and households.

“We clearly have a number of people in houses with an excess number of rooms; either they stay in the family home or they retire. Then, on the other hand, we have people living in overcrowded rooms,” she said.

“It’s not a good allocation of housing if you have people in overcrowded houses and then people with spare rooms.”

But Demographics Group co-founder and demographer Simon Kuestenmacher said people should be able to choose how they live.

“You could alleviate the housing affordability crisis or eradicate it completely, at least in theory, by moving the empty nests from their four-bedroom house into an apartment and a family into the house,” Kuestenmacher said. “But that’s of course not what we do.”

He said many are delaying downsizing because older Australians would rather age at home than go into an aged care facility.

“Australians downsize when the family home becomes a nuisance to manage, or becomes a physical hazard, or once mum has had a fall.

“From the late 2020s we will see large-scale baby boomers reaching the downsizing phase, the peak of this would be around 2037.”

He said that until then, state governments had to build a much more average density similar to cities like Paris, London or Berlin.

“We either have skyscrapers or something resembling a suburb.”

Penny D. Jackson