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Tree change or Sea change

26 Feb 2025

Time for a change? 

The financial pros and cons of relocating in retirement

For many Australians, retirement offers the perfect opportunity to escape the hustle and bustle of city life in favour of a more peaceful, scenic setting. Whether it’s the rolling hills of a country town (a ‘tree change’) or the relaxing coastal vibes of a beachside village (a ‘sea change’), relocating can be the realisation of long-held longing for the quiet life. However, making such a significant move requires careful financial consideration.


The pros

Lower cost of living: One of the greatest financial advantages of moving to a regional or coastal area is the potential for a lower cost of living. Property prices in rural towns or smaller coastal communities are often significantly cheaper than in major cities like Sydney and Melbourne. This can free up home equity, providing extra funds for travel, hobbies or other retirement goals.

Potential to downsize: Selling a larger family home in the city and buying a smaller property in a quieter location can reduce maintenance costs and council rates. It may also provide additional savings or an opportunity to invest the difference for future financial security.

Health and wellbeing benefits: While not strictly financial, the slower pace, cleaner air and relaxed lifestyle of a tree or sea change can lead to better physical and mental health. Fewer medical expenses and a greater sense of wellbeing can contribute to financial stability in the long run.

Community and lifestyle opportunities: Many retirees find that smaller communities offer a more welcoming and engaged social environment. With lower expenses, you may have more funds to enjoy local activities, clubs and travel, enriching your retirement years.

The cons

Costs of selling and buying a home: Relocating comes with several upfront expenses that can add up quickly. These include:

  • Real estate agent fees – Typically 1.5% to 3% of the sale price of your home. On a $1 million home, this could be up to $30,000.

  • Marketing fees – Advertising and listing costs can range from $2,000 to $10,000.

  • Stamp duty – If you’re purchasing a property in a new location, you’ll need to pay stamp duty, which varies by state. For example, in NSW, stamp duty on a $600,000 home is approximately $22,000.

  • Legal and conveyancing fees – Expect to pay around $1,500 to $3,000 for legal paperwork and property transfers.

  • Capital Gains Tax (CGT) – If your home is your primary residence, you are exempt from CGT. However, if you’re selling an investment property, any profit made may be subject to CGT, which could significantly reduce your final gains.

  • Removalist and relocation costs – Hiring professional removalists can cost anywhere from $2,000 to $6,000, depending on distance and volume.

Limited healthcare and services: One thing to consider when moving to a regional or coastal town is the potential for reduced access to medical specialists and aged care facilities. If frequent medical visits are required, travel costs can add up quickly.

Property market risks: While regional property prices can be lower, they may not appreciate as quickly as city properties. If you later decide to move back, you may struggle to regain your original investment.

Higher insurance and utility costs: Coastal homes can be more susceptible to extreme weather, leading to higher insurance premiums, while rural areas may have higher utility costs, such as water and energy, due to less infrastructure.

Social and transport challenges: Public transport options can be limited in regional areas, making it necessary to own and maintain a car. Additionally, if friends and family remain in the city, travel expenses can become a burden.

Making the right choice

A tree or sea change can offer a more affordable and fulfilling retirement, but it’s essential to consider both the benefits and potential financial drawbacks. Before making the move, research property trends, healthcare access and the overall cost of living in your chosen destination.

If you’re unsure, a short-term rental in the area could be a smart way to experience the lifestyle before committing. Careful planning will help ensure that your dream retirement doesn’t come with unexpected financial stress.

All articles are general in nature. Individuals should seek expert advice before acting on any information contained in Active Retirees.