Thinking about downsizing, but not sure what your options are, or if it’s a good idea in the first place? The benefits might surprise you! Are you tired of walking around your home and feeling like it’s just too big, or too much to look after by yourself? Even if you’ve got a partner, there’s no point in having a six-bedroom house when only two of you live there! Particularly as we get older, the need to downsize becomes greater.

Particularly as we get older, the need to downsize becomes greater.

We find it more difficult to look after a larger property, and sadly we become empty-nesters – our kids have moved elsewhere and are making a life for themselves, so their bedrooms aren’t necessary anymore. To that end, 43 per cent of respondents to a survey by the Australian Housing and Urban Research Institute in January 2014 said they had downsized in their last relocation. Half of those people had moved only once since they turned 50, showing that the need for a large dwelling was reduced as their family situations changed.

What advantages are there to downsizing?

Aside from being asset-rich and cash-poor, older Australians may only know the lifestyle of having lots of people running around a bigger home, so don’t know what a smaller place would feel like. For one thing, it can be easier to look after, and depending on where you buy a home, it might also be cheaper! When you sell your current home to downsize, buying a cheaper property could give you more money in the pocket that can go toward your superannuation fund, or even further investment.

The Australian Bureau of Statistics (ABS) reports that almost a third of all older Australians in low-income households are asset-rich, and cash-poor. Wealth is tied up in property, but that means it’s not possible to access it quickly, in the case of an emergency.

If you downsize to a cheaper property, your liquid assets and cash reserves would likely increase, meaning you have more saved up for a rainy day!

Where is your wealth tied up?


downsizing property


How can you increase your cash by downsizing?

When you downsize, you don’t have to compromise your quality of life. In fact, all you’re doing is removing some unused bedrooms and excess floor space from your life. Take the New South Wales suburb of Alexandria, for example. Auction results for the weekend of February 12 show that a three-bedroom house in the suburb sold for $1,690,000, while a one-bedroom unit sold for just $698,500.

That $1 million saving might prove very useful later in life, and if you only need one bedroom, why keep a house with more? For help finding out about downsizing and what options would suit your preferred lifestyle, get in touch with the friendly team at First National Real Estate.

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