Hundreds of new homes are being built for older residents but does it make financial sense?

A Cairns housing project is expected to welcome downsizing retirees but an ever-tightening price gap between small and large homes means elderly people could be better off staying put.

Housing Minister Sam O’Connor, Terry James and Leichardt MP Matt Smith announce the completion of the first 50 of 490 modular homes at the site of the old Cairns drive-in in Woree. Picture: Tim Little

A Cairns social housing project is expected to house hundreds of downsizing retirees by the end of next year but an ever-tightening price gap between small and large homes means elderly people could be better off staying put, experts say.

Queensland Housing Minister Sam O’Connor and Federal Member for Leichhardt Matt Smith revealed that the first 50 of 490 modular homes have been completed at the old drive-in site at Woree and the remaining 440 would be completed by the end of 2026.

The 245 social, 223 affordable and 22 specialist disability apartments are funded through a mixture of state and federal funding as well as private lending that are geared towards elderly residents hoping to cash in on a booming property market and downsize.

LJ Hooker director Nadine Edwards said it was hopeful to see more houses in the mix but when units that cost $250,000 before the pandemic were now going for close to $500,000, it didn’t leave much incentive for residents to downsize.

LJ Hooker Edge Hill director Nadine Edwards. Picture: Brendan Radke

“Take Nana and Papa’s house, it’s $775,000 and they would like to downsize. To buy a little half duplex you might pay $520,000, that doesn’t give them much then for the rest of their lives to live off,” she said.

“When there are only a few options available they are just going to get more expensive and you’re not really left with much at the end.

“The question then becomes, ‘Is it more affordable and better for our future if we make our house just a little more tailored to what our needs will be as we age?’”

Ms Edwards said she believed Cairns had an entire cohort of sellers ready to offload property and make room for larger families but there was nowhere to move to and supply for elderly residents needed to grow substantially to make prices more competitive.

Modular single and double bedroom units at the old drive-in site are expected to hit the market at the end of 2026 but rising property costs have reduced incentive to downsize.

Mr O’Connor acknowledged there was pressure in the sector, especially for those seeking social housing, but was confident the units would fill up in no time.

“If we get people who choose to downsize that’s a great outcome because it frees up homes for families. It’s something that we want to see more of across this state,” he said.

“I’ve got no doubt that this will fill up very very quickly as soon as it’s finished, which hopefully will be by the end of next year.

“Over 50,000 people on (the social housing) wait list is unacceptable. It’s why we’re making changes across the system to get more of those people into safe secure housing and the best way we can do that is by getting more projects off the ground.”

The Woree project, which relies on stacked modular units built in Melbourne and the Gold Coast, is the largest of its kind in the Southern Hemisphere and is hoped to provide a road map to fast and affordable housing projects across Australia.

Mr Smith said housing was still a key issue in the Far North.

“This is a model that can be replicated and now we’ve got proof of concept here in Cairns where we are subjected to some extreme weather events,” he said.

“This is an important first step and obviously we understand that the job’s not done but 490 houses is that step and what we do need is more supply.”

Originally published as Hundreds of new homes are being built for older residents but does it make financial sense?