“You see this pile of bricks?” The old lady gestures around the room. Her living room is decorated in a mishmash of styles, reflecting trends from the fifties to the eighties. But not beyond. In that space, time has stopped. The smell of mould is all pervasive.
“It’s falling down around me. I’m on a pension and my husband is dead. I can’t do the necessary repairs by myself and I can’t afford to pay someone to do them for me.” She sighs. “There is no other income. We had an investment property and we gifted it to my son when he got married. Now he is going through a divorce and he is going to lose that property. I want to help him financially, but I can barely help myself. The only solution is to sell this house – property prices in this area are quite high – but where can I go? I’ve lived here ever since I came to Australia. Neighbours come and visit me. Someone will always knock on my door to check whether I’m alright. I don’t want to move.”
Mr Yiannis is an elderly gentleman on a pension, who is caring for his wife who had dementia.
“We have been married for fifty years,” he exclaims with tears in his eyes. He strokes his wife’s hair lovingly as she stares into space blankly. “She is as beautiful now as she was the day I married her. I haven’t got the heart to put her in a home. As long as I can stand on my own two feet, I will look after her. Even with the limited amount of money I have, I make do. The problem I have is with my daughter’s children. My daughter has not been able to provide for them the way we provided for her. Our grandkids are leading an aimless existence, and I want to be able to at least set them on the right path by providing them with a deposit for a house. Otherwise, in today’s market, without outside assistance, there is no way that they can buy their own place. I want to borrow some money using my home as security to help them but the brokers I have spoken to have told me there is no way that any lender would consider lending me any money at my age.”
Mrs Soula, whose husband died two years ago of a sudden heart-attack, confides: “I was involved in businesses ever since I arrived in Australia. Working from morning to night. I never had to worry about money. My husband maintained the finances and we had several investment properties. We were doing fine and were not entitled to the pension. Never did it occur to me to plan for the future. He had it all in hand. It was only after he died that I realised how much money he owed left right and centre. After creditors took the business and the properties, I am left only with the family home and a fifty year old autistic son. There is barely enough money to maintain the family home and provide for both of us. But what I really want to do, is be able to finally go on a holiday to Greece. I want to spend some time with my elderly sister who I haven’t seen for thirty years and to look after her in her final days. But I don’t have the money and there is no way I can find a way to raise this amount.”
Mrs Katerina is curt and to the point. “I don’t want to move into an elderly people’s home and be away from my garden or my daughter who lives next door. My daughter works and is raising her family. She can’t look after me full time and I need some home care assistance during the day. I had savings which I gave to my daughter over a period of time to help her with her mortgage and I don’t want to burden her with the financial responsibility of looking after me. After trying to secure finance from various quarters, my daughter finally put me on to a reverse mortgage. I now feel secure in my own home, can afford the care I need, without being a burden on anyone.”
As the first generation of the Greek community ages, many of its members are finding retirement a challenge. Conditioned to expect a comfortable pension-funded retirement, a sizeable number are realising that they cannot, on the income they are receiving, fund basic life choices or meet immediate needs. Coupled with a tight lending market, many retirees are enduring a life of privation and anxiety, when they should be enjoying what are considered to be their ‘golden years’.
Chris Moutzikis of Household Capital, a specialist retirement funding provider, has been closely following this emerging phenomenon. “The first generation conundrum is impacted by the fact that there is a cultural shift in traditional expectations with regard to family property,” he observes.
“Traditionally, property was considered something that didn’t belong to a person, but rather, to the whole family, an asset to be preserved and passed on down the generations. This is why we witness the phenomenon of older Greeks living in poverty, because they do not wish to use their assets in order to fund their living. Instead, there is the expectation that they will pass these properties on to their kids. Of course, traditionally, the corollary of that is that the children were supposed to reciprocate by looking after their parents – but in today’s complex society and with work conditions being what they are, that is not always possible. Often I witness cases of parents feeling the need or being pressured to support their children financially, well into their children’s middle age.”
As the above-mentioned examples suggest, the complex emerging and unforeseen needs of Greek-Australian retirees are posing a challenge to inherited concepts of property ownership, causing them to seek novel approaches to funding their retirement. According to Moutzikis, home equity lending, through a reverse mortgage, is increasingly being recognised as a solution to pressing financial and lifestyle problems.
As he explains: “An increasing number of older Greek Australians are taking advantage of the type of loan that allows them to borrow money using the equity in their home as security. That loan can be taken as a lump sum, a regular income stream, a line of credit or a combination of these options. Interest is charged like any other loan, except they don’t have to make repayments while they live in their home. The interest compounds over time and is added to their loan balance. At all times, they remain the owner of their home and can stay in it for as long as they want. Most importantly, the loan, interest and fees are paid only upon their death, sale of the property or where they seek aged care accommodation. In many cases, the flexibility exists for the loan to be repaid prior to any of these events taking place so that children who wish to retain their parents’ property have the opportunity to do so.”
The erosion of social certainties and the cultural diversity of our community means we often overlook the extent to which access to capital impacts upon the way our understanding of family is constructed and how such constructs are challenged, altered or evolve in the face of challenges to one’s standard of living.
According to Moutzikis, embracing new (with regards to the first generation of Greek-Australians) ways of accessing capital, rather than threatening traditional perspectives of family, can actually enhance them: “Home equity lending can improve retirement lifestyles by topping up superannuation, enhancing retirement income, and improving retirement housing. Home equity can also be used to fund in-home care and support the transition to aged care – a large challenge currently faced by our community. The flexibility of enabling the transfer of home equity between generations to fund first home buyers’ deposits and school fees is in keeping with the grandparents’ generation continuing to take an important and respected role in the upbringing and care and welfare of their descendants. How more Greek can you get?”
As more and more Greek-Australians seek financial advice to take advantage of such flexible products, it is worthwhile to appreciate just how central the concept of property ownership is to the traditional Greek identity. Could such products conceivably be offered to asset rich and cash poor Greek-Australian community organisations in the future?
“It is certainly worth considering,” Moutzikis smiles. “At the end of the day, in the traditional Greek view, you are nothing without property. Developing a way in which you can preserve your property, and be able to fund your aspirations, is key to the Greek conception of self-identity and familial obligation.”