Both the article and I simply stated that ~73% of the total wealth of those over 60 is in the PPOR. We have no interest in this instance about how it got to that level, but in context it adds to equity risk. Therefore, when those over 60 have only 27% of other assets outside the PPOR (and to add insult to injury, might have property trust holdings in their Super funds in that 27%), the average person’s total wealth is very clearly heavily weighted to one investment; property.
However, people will more often use that PPOR equity to scale down to a cheaper property and use the extra equity to live in retirement than move to equal value, or rent as another option. Or stay and use an equity drawdown facility to do the same, regardless of what we might think prudent. If you have not saved the capital or got the assets, your choices are limited.
On its sale, the PPOR provides one of the biggest tax incentives of all at 100% tax free and is likely why for example, most 60+ year olds have ~73% of their total wealth tied up here (but logic says it is just sheer luck to date, mainly because of capital appreciation). The PPOR is not an asset when you know the simple difference, but as most people don’t, the capital gains free environment obviously appears attractive. As the article did not indicate any detail, it is possible they will have to use some of that 27% to pay off the PPOR, therefore at some point worsening the ratio.
I look at it this way, if you are heavily geared and have most/all of your assets in residential property, single or multiple IPs, you are a high risk speculator as your assets or wealth accumulation capacity are at high risk should the market tank or go sideways for years. If you have little or no gearing and are happy with ROI regardless of the capital value (why is beyond me), you are likely an investor as you should have weighed up the capital loss risks.
Similarly, if the average punter is using their PPOR to fund their retirement, and we know many do, they likewise are high risk speculators should the continued or existing capital appreciation level of their main ‘asset’ decrease or go sideways, if that is contrary to their successful retirement financing plan.