The ups and downs of downsizing

21 January 2022

By KATHY SALTER

Downsizing from a family home is a big decision. More than just moving house, it’s a lifestyle change. For some, it frees them from the burden of property maintenance and provides the capital to fund a life of leisure. For others, the move can be more confronting and lead to challenges for agents.

When Will decided to sell his family home, he was excited by the future.

“My old house was dragging me down,” he said. “I got divorced there. I was surrounded by 20 years of stuff that I didn’t need, and I’d had enough of cleaning three bathrooms every week. It was time to move on.”

Will chose to downsize to a modern, two-bedroom apartment a stone’s throw from the ocean and has never looked back. He’s one of a growing number of empty nesters swapping the large family home for something a little more manageable, plus a boost to the bank balance to help them enjoy their new lifestyle.

“You need a long-term view. Start early, provide solutions and give them support by project managing a plan to help them achieve their dreams.” – Penelope Prior, Chadwick Real Estate

Downsizing on the rise

Michael Finger, downsizing specialist and Founder of Ray White Double Bay, has noticed a clear increase in people looking to downsize in the last five years and points to the fast-moving housing market as one of the key factors.

“People can sell much more readily than before, so they’re happy to buy off-the-plan with the confidence that they can sell their property to fund the move, and have some cash left over,” he said.

Penelope Prior, Senior Sales Consultant at Chadwick Real Estate, agreed, adding that developers are providing more high-quality retirement lifestyle options, with medical advances and changes in life expectancy also coming into play.

“People who were born in the 1940s and 50s expected to work until 65 and then only have five or 10 years of retirement to plan for financially,” she explained. “They didn’t expect to live for another 20-plus years after retiring and many need to sell to make the most of that time.”

Penelope said that the triggers for downsizing can vary by age.

“Apparently, the divorce rate is two-thirds higher for baby boomers, because they grow apart and make a move when the children leave,” she said.

Penelope has found that the 55 to 65 bracket is influenced by convenience, market trends, and the boost they can give to their superannuation fund from the sale of a home. After 65, health reasons also come into play, when one or the other partner may be declining physically or mentally. The larger home may be too hard to manage or the need for cash flow may dominate in retirement.

After 75, Penelope said the motivation is usually releasing themselves from the burden of maintaining a larger property or a desire to live nearer to family.

“People get lonely, especially since the COVID-19 lockdowns,” she noted. “Whatever the reasons, it’s important to respect their goals.”

“There are a lot of emotions tied up in those family homes. Some people have been in their home for up to 60 years. Their kids and grandkids have grown up there. There have been engagements, marriages, birthdays. You have to help them and guide them through it.” – Michael Finger, Ray White Double Bay

Guiding downsizers

More than just moving house, downsizing involves a lifestyle change. For many, this can be confronting and often brings with it a range of emotions. Sales agents have a pivotal role to play in helping downsizers navigate the transition and ease stress.

“There are a lot of emotions tied up in family homes,” Michael said. “Some people have been in their home for up to 60 years. Their kids and grandkids have grown up there. There have been engagements, marriages, birthdays. You have to help them and guide them through it.”

Penelope’s advice is to “give them time.”

“You need a long-term view,” she explained. “Start early, provide solutions and give them support by project managing a plan to help them achieve their dreams. Communicate regularly and offer guidance with respect.”

“As an agent, you need to be patient and put yourself in their shoes,” Michael added. “Approach the sale with maturity and do plenty of research. You need a good understanding of the product you’re selling and work with developers you trust. I always make sure they fit my standards, in that I would feel comfortable selling a property to my best friend or family. I think that’s really important.”

Penelope agreed.

“As an agent, you will end up with a long referral business if you sincerely act in the best way possible for your client,” she said.