Cash-strapped retirees are increasingly looking to liquidate real estate in exchange for cash and rental accommodations. This trend is likely to continue for the next decade-plus and exert downward price pressure on elevated property markets all over the world.
This will be particularly felt in places like North America, where an aging population of present homeowners, low investment yields and insufficient savings (aggravated by some of the most expensive housing in the world), are quickly changing the dream of homeownership into the dream of less overhead. Meanwhile, highly indebted younger people have a similar plan. This leaves the question of who will buy the present inventory of super-expensive housing?
At some point, the cost of renting will no doubt rise to the point where homeownership is relatively cost-effective once more, but not before the price of homes have corrected considerably.
Before Joe retired in 2016, they lived in a 4,000 square-foot home in southern Washington. It just wasn’t for them anymore.
These days, their home is a six-foot by seven-foot overlanding vehicle they use to travel the world, and they plan to rent something more permanent when their adventure is over.
The couple wanted to start living their retirement dreams sooner rather than later, and found that selling their home was the best way to do that. “Selling the house wasn’t so much a strategy as it was a necessity. It was the only way we could retire early,” Joe says.
For this couple and a growing number of retirees, a combination of lower expenses, freedom, and flexibility are making renting more alluring than owning.
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