Upsizing and downsizing: things to consider before making the move - John McGrath

 It’s no secret that our population includes a large number of older Australians, with a Federal government report this month finding the number of people aged 65 years and over rose from 12% to 18% in the 20 years to 2025.

Single-person households have increased significantly since the 1950s as well, with the 2021 Census finding solo occupant properties had escalated to 26% since 1981.

Both groups may join the nearly 2 million people already planning to downsize in the next five years, an uptick of 14% since 2021, according to Downsizing.com data in March.

A report by McGrath Research from earlier this year also found high-net-worth demand for luxury downsizing remains strong.

Meanwhile, our cooling market is providing upsizers with plenty of property opportunities. This new cycle gives these buyers the chance to benefit from less intense buyer competition.

But whether you plan to downsize or upsize in the future, there are several details to consider when making this move.

Retirees who may have lived in the same home for decades can often use the support of family and friends when buying again, particularly those familiar with today's property market. It's also important to think ahead about future healthcare and mobility needs, with a single-storey home often the most practical choice.

But there are benefits to downsizing at any age, especially as our cost-of-living crisis continues.   Downsizers can enjoy a smaller house with lower mortgage repayments and shorter loan term. Such properties don’t require major ongoing maintenance and offer lower utility bills, council rates, and insurance premiums.

In many cases, people who haven’t moved for years may have built up sizeable equity in their homes. These additional funds can mean more flexibility and freedom to travel or to relax and entertain, rather than maintaining a large garden or organising repairs.

Upsizing presents different challenges, including financial ones. But for families, the extra space and lifestyle benefits often outweigh the drawbacks, making the move worthwhile.

Extra storage areas, larger rooms, and more outdoor space can make a big difference, even to small families. And if more children are on the horizon, the case for upsizing becomes even stronger. 

Moving to a larger property can mean moving to a location closer to higher quality schools and other everyday amenities such as shops, parks, transport and healthcare.

But as I mentioned earlier, the cooling market provides the best reason for upsizing. For a start, there is a good chance that upsizers can find better value in this new cycle. Buyer competition has eased, partly because some investors have stepped back following the Federal Budget tax changes. A softer auction market and the traditionally quieter winter selling season are also working in upsizers’ favour.

Whether you're considering downsizing or upsizing, take the time to assess your options. Your priorities will differ depending on your stage of life, but access to essential amenities such as healthcare, schools and public transport may factor into your decision.

With market conditions shifting in buyers' favour, there are plenty of opportunities for both upsizers and downsizers to make their next move with confidence.