Retirement villages are popping up left, right, and centre, cherished family homes are flooding the market, mobility scooters are taking over the pavement and ‘ageing in place’ has quickly become one of the hottest home renovation trends. Yes, Australia’s ageing population (a steadily increasing share of those aged 65+) is reshaping everything from retail to healthcare demands and, in a big way, the housing market. Many older Australians are choosing to downsize – letting go of the much-loved 3+ bedroom family home – and transitioning into properties that both free up equity and better suit changing lifestyles. Here’s what’s behind the downsizing movement, what they’re typically looking for in a new home, and how they’re shaping Australia’s property market now and for years to come.
What’s behind the desire to downsize?
Whether you find yourself rattling around the house now that the kids have well and truly flown the nest, tired of the upkeep that comes with a larger home or grounds, or just keen to free up some equity to enjoy your retirement years, downsizing often makes a lot of sense for both lifestyle and financial reasons. Australians are living longer than ever before and staying active later in life, making downsizing increasingly appealing.
What are downsizers looking for in a home?
Downsizers typically have some experience with property ownership and, as a result, will have a very clear checklist in mind. They’ll also benefit from a decent amount of equity, which will allow them to pay a good price for a property that ticks the boxes. Looking to appeal to this demographic? Here are six home downsizer hot buttons:
1. Low-maintenance love
Spending your retirement mowing endless lawns or cleaning barely used bathrooms isn’t what most of us have in mind for the golden years. It therefore comes as little surprise that reducing the amount of property upkeep required is one of the top reasons Australians aged 55+ decide to downsize. This makes townhouses, apartments, and smaller single-level homes popular choices.
2. Quality trumps size
Downsizing really doesn’t mean downgrading – in fact, it’s often quite the opposite. For example, downsizers will happily forego a separate laundry room for a functional, compact, concealed-cupboard style laundry fitted with high-end fixtures. With less load on spaces, smaller floor plans work well, but don’t compromise on modern design and quality finishes.
3. Location that’s high on lifestyle
A medical practice down the road, a supermarket within strolling distance, and the perfect spot for that mid-morning latte just on the edge of the park – what more could you need? Downsizers favour locations that enable low-stress, high-enjoyment lifestyles, and walkability and access to key amenities are a huge part of this.
4. Security and community
While they may not be ready for retirement village lifestyles just yet, well-managed developments or secure buildings that come with a built-in sense of community offer the perfect middle ground. With one in five older Australians saying they experience loneliness often, or all the time (which comes hand in hand with increased mental and physical health risks), being part of a strong community becomes increasingly important.
5. Future-proofed for accessibility
What’s worse than moving house? Moving again! Downsizers aren’t often looking for a stone home; they’re looking for a home that will easily accommodate any future mobility or access needs. As a result, accessible home design is on the rise, prioritising factors such as open-plan layouts, wider doorways and hallways, step-free entries, functional storage and lighting, and adaptable bathrooms, kitchens, and laundries.
6. Lock up and leave friendly
With over 70% of Australians prioritising spending their retirement savings on travel, low-maintenance homes that can be left behind without any worries are a popular choice for downsizers. This desire to join the growing grey nomad revolution is driving demand for homes like premium apartments, townhouses and lifestyle developments.
The changing shape of the housing market
Beyond individual property transactions, the influx of active downsizers is completely reshaping today’s housing market. It’s shifting supply, impacting development trends and creating competition in previously flat property segments. Here are the key movements we’re seeing:
- Increase in larger homes hitting the market
There’s an influx of long-held, large family homes in established suburbs coming onto the market, opening up opportunities for younger families looking to upgrade. This has a flow-on effect for the rest of the residential property market, with upgraders selling properties that appeal to first-home buyers.
- Price uplifts in downsizer hotspots
With daily commutes to the office taking a back seat for many downsizers, proximity to the city is trumped by coastal or country locations that are high on lifestyle factors. With most downsizers effectively cash buyers (having paid off a mortgage on a bigger house), they’re bringing larger budgets to comparatively affordable coastal or country towns, which will drive prices higher.
- Market mismatch between supply and demand
While Australia’s broader and associated National Housing Accord shortfalls continue to make headlines, we’re also experiencing a mismatch between the types of properties being built and demand – particularly for downsizers. This is putting increased pressure (and driving price inflation) on the apartment and townhouse market.
- Smart developers and investors are capitalising on downsizer demand
From single-level living designs to age-friendly layouts and more compact luxury homes, smart developers and investors are seizing the opportunity to create bespoke developments designed for downsizers. As the Australian population continues its ageing trajectory, demand in this category will continue for some time.
The financial impacts of downsizing
One of the most common reasons for downsizing is financial reasons. It’s a popular way to free up equity that boosts retirement savings, reduces debt, supports family members, and generally allows homeowners to enjoy their retirement years. Government incentives and policies have also made downsizing more appealing in recent years, enabling downsizer contributions to boost retirement savings. This allows eligible Australians aged 55+ to contribute up to $300,000 (per person) from the sale of their home into a complying super fund. In addition, some states (such as Tasmania) offer stamp duty concessions for downsizing pensioners or duty rebates (in Western Australia) for purchasing off-the-plan apartments or units.
Downsizing downsides
Downsizing comes with plenty of benefits, but it’s not always easy. The main challenges today’s downsizers face are:
- Limited supply of desirable downsizer homes, and this is likely to increase, as by 2050, a third of Australia’s population will be aged 55+.
- Mourning the emotional connection to a long-term family home.
- Moving expenses and fees associated with selling a family home.
- Adjusting to less space, less storage, less privacy and ongoing costs (such as strata levies) – particularly if moving from a standalone home to an apartment or townhouse.
- Dealing with the boomerang generation – adult children who have moved back into the family home.
Because of these factors, many downsizers take time to plan their move carefully – downsizing is a major life decision that often takes years to plan and execute.
Downsizing is not a passing trend; it’s a long-term demographic shift
As more Australians enter the 55+ stage of life, downsizers are emerging as one of the most influential forces in the Australian property market. They’re shaping supply and demand across multiple sectors of residential housing and shifting property hotspots, too. This isn’t a short-term trend. It reflects actual population data that will drive long-term property decisions.
Downsizing is often a multi-year journey, so whether you’re considering a move now or in the future, speaking with a local real estate professional can help you explore your options and navigate this rapidly evolving market with confidence – so you can downsize your home but upsize your lifestyle. For award-winning, legendary service, get in touch with our team at First National Real Estate Caloundra – we’ll guide you every step of the way.
DISCLAIMER
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial, or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial, or real estate decisions. Click here for full Terms of Use.