No place like home
30 Jan 2013
It’s one of the most important decisions retirees face: whether, when and how to downsize their home.
Selling or renting out the family home to move to a smaller property has many attractions. It frees up capital and reduces time spent on property maintenance.
But there are also many other considerations to make.
Leanne Pilkington, general manager of real estate agency Laing & Simmons, says it’s important to take a long-term view when making decisions about downsizing. “You don’t know how long you’ll be driving,” she says, “so consider proximity to transport.
“You also need to think about how far you want to move from your family. The idea of a sea change can be attractive, but if it means your family and friends won’t come to visit, you have to weigh up whether it’s worth it.”
Sell or rent?
Leanne says that in her experience, most people sell rather than rent out their house when downsizing. “We find usually people want to access the capital in their house to be able to enjoy their retirement. People sometimes rent first to see if they like the area, but we don’t see that very much.”
For retirees who feel they need help selling their property and finding something else to live in, Pilkington says it can be an idea to use a buyer’s agent.
“They will do as much or as little for you as possible – from finding a property to bidding at auction. But they do charge a fee,” she says. “Selling and buying property can be a daunting experience and it’s important to do as much research as possible.”
Finding an affordable property can be a challenge for many people who want to downsize, says Paul Versteege, policy coordinator with the Combined Pensioners & Superannuants Association of NSW.
“It can be difficult to find something affordable to move to, especially when you take into account stamp duty, agents’ costs and legal fees,” says Versteege. “An option is to move where there are retirement communities and serviced apartments that are more affordable.”
Moving on
Where people move to when they choose to downsize depends on their age, according to Barry Mann, general manager – development, retirement living at Stockland.
In his experience, young retirees aged between 55 and 70 are more likely to move further afield for a sea change or a tree change, or to follow their kids.
“Older retirees aged up to 85 tend to move no more than five kilometres from where they currently live. So they are downsizing within an area they currently know.” He says the vast majority of Stockland’s residents fit the latter category.
Conscious that many who buy one of their properties are downsizing from a larger family home, Mann says Stockland’s retirement accommodation is built with considerable storage facilities. “We also have assistance programs to help people decide what to bring with them to make it easy for them to move,” he says.
On a budget
Peter Sherrie, past-president of the Urban Development Institute of Australia acknowledges that not all retirees are wealthy and an option for people on a budget is a lifestyle village of relocatable homes.
“You might pay a ground lease of between $100 and $150 a week and you don’t need to pay deferred management fees when you exit the property. We also see people who move from a family home to medium-density apartment living, but that also means getting used to paying body corporate fees.”
If you’re thinking about downsizing, it’s important to remember it doesn’t necessarily mean moving to a pokey apartment to wile away your twilight years. You can still downsize your home and have space for family, friends and hobbies, and at the same time move to more appropriate accommodation that takes a lot less looking after.
It might also mean you get to engage more in the community around you. As the saying goes, a change is as good as a holiday.
®