For many, the property journey is all about climbing the ladder – moving from a first home to a family house, and perhaps even the dream ‘forever home.’
But what happens when you reach the top and it’s time to take a step back down?
Downsizing is a major transition, and it requires just as much planning and care as any other move – and often more.
Why do people downsize?
The motivations for downsizing are as varied as property buyers themselves, but a few themes come up time and again.
Most commonly, it’s about space: the family home is simply too large for one or two people, and maintaining it – especially the garden or a pool – becomes more burden than pleasure.
Other drivers include a desire for ease-of-living, such as the impracticality of stairs as people age.
Or the need to free up equity for retirement, travel, or to help children get into the market.
Sometimes, it’s about location: the suburb that worked for a growing family no longer suits, and priorities shift towards walkability, access to restaurants, arts, or medical services.
When does downsizing happen?
For most, downsizing coincides with retirement or when children leave home. It can also happen earlier, especially as flexible work allows people to rethink where and how they want to live.
Sometimes, it’s a choice – seeking a tree or sea change, or a more cosmopolitan lifestyle in the inner city.
Other times, it’s a necessity, such as when health or mobility issues make the family home unviable.
The key message: it’s always better to downsize on your own terms, rather than being forced into a rushed decision by unforeseen circumstances.
Where do people downsize to?
There’s no one-size-fits-all answer.
For some, it’s about moving closer to services – medical facilities, shops, gyms, or public transport. Others want to be near family, or in a lifestyle precinct where everything is within walking distance.
The classic ‘sea change’ or ‘tree change’ remains popular, especially for those with a holiday home that can become a primary residence.
Some clients have taken a more adventurous approach, such as travelling around Australia in a caravan to find the perfect town to settle in.
Others swap suburbia for the vibrancy of inner Melbourne – Fitzroy, Collingwood, South Yarra, or Albert Park – where they can walk to the arts precinct, the MCG, or their favourite restaurant.
What types of properties suit downsizers?
When it comes to downsizing, there’s no one-size-fits-all solution – each move is shaped by lifestyle, needs, and future plans.
However, a few property types consistently emerge as favourites among downsizers, each with their own pros and cons.
Houses
Many downsizers still want the feel of a house, just on a smaller scale. The priority often shifts to a single-level layout, so stairs are no longer an issue. Often the key is to retain enough accommodation space for day-to-day comfort and furniture collected over the years, without feeling cramped. It’s more about the block size; they want a manageable garden or outdoor area, but not the maintenance burden of a large backyard or pool.
Villa Units
Villa units are a perennial favourite for downsizers, and with good reason. There’s a wide variety on offer, from 1950s and 60s originals (typically two bedrooms, one bathroom, a single garage, and a small courtyard) to modern builds with three or four bedrooms, two or three bathrooms, and double garages.
The older style often suits those seeking a low-maintenance ‘town base’ or who don’t need much space, while the more contemporary versions work well as a principal residence, offering generous living areas and outdoor space without the upkeep of a traditional house.
The single-level design is a major drawcard, making them accessible and practical.
Apartments
Apartments; especially medium-density or boutique blocks purpose-built for downsizers are increasingly popular.
These developments are typically smaller (10-12 units), with features like lifts, basement parking, and thoughtful layouts that prioritise accessibility and storage.
Developers have become more attuned to the needs of downsizers, so these apartments are often spacious, light-filled, and easy to lock up and leave.
For those wanting to be in the heart of the action, high-rise apartments in Docklands, Southbank, or South Yarra are attractive. They offer secure basement parking and the ability to be out enjoying restaurants or the arts precinct within minutes of arriving.
Townhouses
Townhouses can sometimes be a good fit – especially newer designs with the master bedroom, ensuite, and main living areas on the ground floor, and additional bedrooms upstairs for guests or visiting family.
However, traditional two-storey townhouses are less popular with downsizers, mainly due to the challenge stairs can present as people age.
Some developers are now catering to this market with more flexible, accessible designs, but the two-level layout still makes them less appealing than single-level alternatives.
Key Considerations Across All Property Types
Regardless of property type, downsizers should consistently look for:
- Single-level living or at least a ground-floor master suite
- Low-maintenance design, inside and out
- Good storage to accommodate treasured possessions
- Natural light and open-plan living for entertaining
- Secure, easily accessible parking
Planning and avoiding pitfalls when downsizing
Downsizing isn’t simply the reverse of upgrading. It demands careful planning – often more so than buying a bigger home.
Start by clarifying your objectives: is it about freeing up equity, reducing maintenance, or changing lifestyle?
Engage the right advisors early: a financial planner, solicitor, property advisor, and possibly a mortgage broker (even if borrowing capacity is limited).
A common misconception is that downsizing always releases significant equity. In reality, moving from a large but dated family home to a smaller, well-located, newly renovated property can mean the price difference is far less than expected. Thus, sometimes the move should be more about lifestyle than a financial windfall.
Timing is another critical factor. Younger downsizers may have the option to buy first, then sell, but for many at or near retirement, banks are reluctant to offer bridging finance – meaning you’ll likely need to sell first.
In that case, negotiate a long settlement to give yourself time to find the right property.
Always have a contingency plan if you don’t secure a new home in time. Whether that’s renting temporarily, staying with family, or using a holiday home.
ON GROUND CASE STUDY
A Seamless Downsize
A few years ago, we helped a couple whose children had left home, but remained in Melbourne.
Their goal was to stay close to family, but they no longer needed the large house. After consulting with their financial planner, it was clear they’d need to sell first to fund the next purchase.
In this case, a local agent had recently sold a similar property and identified an underbidder who was still motivated. After extended negotiations, we secured a strong price just before the market softened, and achieved a six-month settlement – giving the couple ample time to search for their next home.
It took the full six months, but we found the right property and coordinated settlements for a smooth transition.
The move also freed up significant equity for retirement, all thanks to clear planning, patience, and flexibility.
Take home message
Downsizing is a major life transition, not just a property transaction.
With clear goals, expert advice, and a willingness to plan for the unexpected, it can be a rewarding new chapter, unlocking lifestyle benefits and, in some cases, a boost to financial freedom.
The key is to approach it proactively, so you’re in control of the process rather than reacting to circumstances.
For those at the top of the property ladder, stepping down can be just as exciting – and just as rewarding – as the climb up.
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