By Editor,Matt Jones

Copyright dailymail

Property expert reveals how millions of Australians are facing a retirement nightmare – and the only way to avoid it is to ‘build two new cities’

Future rental crisis for older Aussies

READ MORE: Dire reality of Australia’s rental crisis

By MATT JONES, SENIOR NEWS REPORTER, AUSTRALIA

Published: 17:23 BST, 12 September 2025 | Updated: 17:23 BST, 12 September 2025

Two new cities must be built in New South Wales to avoid a future rental crisis that will severely impact millions of Australians’ retirement savings, a top finance broker has warned.

Recent research reveals more retirees than ever before will be stuck in rentals and forced to use their superannuation to pay landlords.

Four million Australians aged 65 and over will be in rental retirement by 2056 – a 202 per cent surge on the current 1.37million.

In Sydney, the median rent of $1,085 per week creates a $56,420 annual drain on retirement funds, which continuously erodes the savings of retirees while homeowners preserve their wealth.

This divide creates two distinct retirement experiences with homeowners enjoying financial security and renters watching their super drain away on housing costs.

If home ownership rates had remained at their 2016 peak, only 2.2million Aussies would be renting at retirement by 2056.

But Australia’s property price explosion means an additional 1.8million people will face rental retirement, which is a direct consequence of housing becoming increasingly unaffordable, particularly in NSW.

Buyersagent.com.au predicts this surge will place an enormous strain on the economy because rental retirees will deplete their superannuation while increasing reliance on the age pension.

The amount of Aussie retirees who will be forced to rent for the rest of their lives will go through the roof in the next 30 years

There will be millions more over 65 renters in the next three decades which will put an enormous strain on the economy

Mansour Soltani, 46, a finance broker with more than 20 years’ experience in the property space, told Daily Mail he expects Sydney to be another Hong Kong, London, or New York.

‘Where wealthy people, or families, have property and pass it on to their kids and their kids pass it on to their kids and everyone else rents,’ he said.

Mr Soltani has been buying and investing in property across Australia since 2000.

He said there was ‘a way back’ from the future renting crisis but it would require huge shifts in the way the government operated.

‘They would need to build new cities with great transport into the city,’ he said.

‘If we have two more cities in NSW that were tech hubs and everyone wanted to work there, the demand for Sydney would start to decrease.

‘It would have to be that sort of a shift. The country has to start building other cities at some point.’

Australian retirement savings companion, the ASFA Retirement Standard, has outlined the superannuation lump sums needed for the average Australian to retire at 67.

There’s set to be a staggering 202 per cent increase in the amount of over-65s who will rent into retirement

Finance broker Mansour Soltani new cities need to be built to stop the rental crisis

A couple who own their home will need $49,992 per year in savings to live a ‘modest lifestyle’, but renters will need to cough up $66,296 a year to live in similar fashion.

The lump sum estimates prepared by ASFA take into account the receipt of the age pension both immediately and into the future.

James and Liz, who are in their late 20s, recently moved in with her parents because they can’t afford to rent and save for a house deposit at the same time.

The western Sydney couple are saving ‘every penny’ while they live rent-free so they don’t fall into the trap of being one of the 4million Aussies who enter retirement as renters.

‘We save every penny. We want to be homeowners and not be renting,’ James told Daily Mail.

‘It’s like you’re running on a treadmill. You’re not really getting anywhere.

‘It’s definitely a strain. It’s a strain on my relationship with my girlfriend.’

James told of a recent disheartening experience which he said made the couple realise why it’s so hard to get into the property market.

James and Liz have had to move back in with her parents to avoid being long-term renters

‘It’s frustrating because we went out the other day in the Waterloo area, and we were talking to a business owner there who was telling us how apartments were empty but they can’t fill them because they want too much rent,’ he said.

‘It kind of opened our eyes a bit because it’s just full of greedy people who aren’t releasing them to the public, therefore it’s harder to get a place and house prices go up.’

Financial strategist and Your Future Strategy managing director Gareth Croy told Daily Mail: ‘We are looking at a generation of Australians who could be lifelong renters, even in retirement which is not something we’ve seen before.’

‘We have seen three interest rate cuts so far in 2025, with another quarter of a per cent cut being forecast for November,’ Mr Croy said.

‘Increased borrowing capacity should see an increase in first-home buyers able to get into the market, with a reduction in rates also helping them with that deposit hurdle.

‘As interest rates come down and more buyers enter the property market, house prices do go up as a result of that increased interest so it’s a double-edged sword.’

Scott McKenzie, 28, is an electrician who lives in Dee Why on Sydney’s Northern Beaches with his partner.

The pair earn more than $200,000 a year and have saved up $110,000 by sacrificing holidays and making all of their meals at home rather than dining out.

Scott McKenzie said he and his partner may move to his native Scotland if they can’t find a property to buy by the end of the year

The couple and their dog, Dave, are looking for a modest three-bedroom townhouse or apartment but Mr McKenzie told Daily Mail ‘everything seems out of reach’.

‘A few years ago – before we had enough for a deposit – there was a lot more on the market, but anything that seems remotely within our reach is either snapped up straight away, or sells for way over the odds,’ he said.

‘We want our own place for the stability. If we stay here, it feels like we’ll be renting until we retire.’

Mr McKenzie said they may move back to his native Scotland due to the tough housing market.

‘We’re giving it until the end of the year and if we can’t buy anywhere, we will have to decide whether we move out of Sydney somewhere regional, Queensland, or Scotland,’ Mr McKenzie said.

‘I moved to Sydney when I was six, and it’s home to me.

‘If we sold my van, and our possessions to leave Australia, we’d be set up financially (in Scotland), but it’s cold.’

Mr Soltani said, however, that the news may not be all that grim and claimed Aussies may find other ways to invest and grow their wealth ahead of retirement.

He explained that when he started investing in 2000, rental yields were about six or seven per cent and now they’re about 2.5 per cent.

‘At some point people won’t see the returns in property and they’ll just say “stuff it, I’m putting my money into the share market”,’ he said.

‘I think people will eventually give up on property as an asset class and they’ll just use shares as a way to generate wealth and set themselves up for retirement.

‘It’s not all grim. We might be giving up the dream of owning our own homes and I know this is weird for me to say as a mortgage broker, but there are other asset classes to look into.’

Mr Soltani suggested if you’re ‘hellbent on owning property’ you can use shares as a catapult into buying one.

‘You can invest into the share market, have that compounding, do some salary sacrificing with your super, then you get to about 45 and cash it all out and you buy something,’ he said.

‘The traditional government grant helping you get into the property market has done its dash.

‘A lot of people are buying crypto with returns they would never see in property.’

Share or comment on this article:
Property expert reveals how millions of Australians are facing a retirement nightmare – and the only way to avoid it is to ‘build two new cities’

Add comment