Whether its just that time of year or just down to chance, I seem to have come across a number of people looking to downsize of late, whether as kids leave the nest (and empty bedrooms) or age and health encourages less maintenance and more R&R.
While there are the obvious pluses to downsizing from a lifestyle perspective, there is also the financial benefit, where ideally the larger home sells for more than is then expended on the smaller one (though for the very nice, or waterfront smaller home, you might sometimes find the opposite).
One space in particular where we are seeing great value in the transition, is going from a larger house, to an apartment.
Houses have far and away been the best performers post-COVID as people have sought larger spaces and moved away from the CBD. This has meant that while units have improved in value (particularly those well geared towards lifestyle such as beachfront or holiday homes) there should be more gain in the value of the property being sold than the one being purchased, as units in particular remain (well) below replacement cost in many instances.
Now, this might all sound like good news, but how do you make the most of it as that potential downsizer? Well to start off, you need to do the same thing most people do, and talk to your bank or broker about your individual financial position, and what you can afford to buy (and whether you need the funds from your home to do it or you can move and then sell afterwards). Buying a new home subject to sale can take some of the risk out of the move on your side, but it can also be less attractive to the seller on the other end, either reducing your chances of success or requiring better terms elsewhere (the price) than otherwise. It can also add some stress on moving day (from personal experience!) when everything happens at once.
Once you have your funds sorted (or at least a plan in place), then you should shop not just locations, but buildings (and body corporate fees) to get a good idea of your ongoing costs. These can vary wildly, even in similar areas, with fees for an Esplanade unit (for example) running anywhere from $6,000 - $16,000 per year for a 2 bedroom.
With your ducks in a row though, and the right property in hand, you can enjoy a more relaxed lifestyle, “lock and leave” come holiday time and potentially have some helpful cash in your bank account too. And whether its helpful or not – sometimes less room for relatives to stay can be a good thing!