Downsizing is the term used when older Australians sell a family home and relocate to a smaller, low maintenance residence. This often involves the move from a house to an apartment or unit, or to a residential village. It’s also a term used in ‘Downsizing contributions’ when, under certain conditions, funds made from the sale of a more expensive property can be moved into super without many of the normal restrictions applying.
It’s easy to believe that downsizing is the ‘new black’ – a trend that’s taking over for retirees. But that’s not quite the case. In fact recent research tells a very different story. According to Professors Phelps, Ong Viforj and Clark, a hefty 86% of older Australians already live exactly where they wish to stay. Specifically, 67% strongly prefer to stay in their current neighbourhood and 19% have a moderate preference to do so. This is not quite the rush to ‘up stakes’ and move that the media portrays.
That’s probably because moving home is one of the highest ranking items on the list of stressful life occurrences. It’s also no doubt due to the complex mix of emotional, financial and logistical challenges associated with selling up and buying something smaller.
The following is a brief list of the major pros and cons which older Australians confront when they are considering downsizing. It’s entirely personal how important each factor might be in your life, but they are all worth thinking about.
