More empty nesters are likely to take advantage of the current conditions of the housing market, leading to a surge in downsizers over the next months.
Raine & Horne executive chairperson Angus Raine said empty nesters are starting to make a move to keep up with the favourable conditions that make it ideal for them to sell.
“The strong returns produced by property markets around Australia have clearly provided empty nesters with the incentive to make a move,” he said.
Australian house prices have grown by 22.1% over the past year, a growth rate not seen in more than three decades.
“Downsizers realise they must sell up to capitalise on this terrific growth probably even more than other vendors,” Mr Raine said.
Recently, a freestanding house in Strathfield, New South Wales was sold — this was the first time that the house has changed hands since 1962.
“I have never seen in my 35 years in real estate more properties selling for the first time in 40, 50, 60 and even 80 years,” Mr Raine said.
Positive boost for downsizers
Mr Raine said empty nesters sell their principal place of residence to beef up their retirement savings, particularly through downsizer contributions into superannuation.
Announced during last year’s federal budget, eligible individuals aged 60 years or older can choose to make downsizer contribution into their superannuation of up to $300,000 per person ($600,000 per couple) from the proceeds of selling their home starting July this year.
This was previously only available for Australians aged 65 and above.
“Taking advantage of downsizer super contributions is not only a fantastic way to turbocharge retirement savings tax effectively, but empty nesters can make a community contribution by freeing up their larger family homes for the next generation of upgraders,” Mr Raine said.
Housing Minister Assistant Treasurer and Housing Minister Michael Sukkar said this update in superannuation policy will improve financial flexibility among older Australians.
“This may encourage more older Australians to downsize to homes that better meet their needs, ultimately increasing the supply of larger homes for young families,” he said.
Top tips for downsizers
Mr Raine said one of the top considerations downsizers need to take is the amount of space they need — a smaller living area and up to two bedrooms would be ideal for them. This will dictate how much downsizers need to be able to move.
“Consider what kind of property you want to move into and account for the costs associated with living there such as stamp duty, body corporate fees/strata levies, utility bills, council rates and insurances,” he said.
Location is also a crucial factor, and this could be based on several things.
“This could mean staying in your current neighbourhood and moving into a smaller property such as an apartment or townhouse, a tree change, a sea change or even relocating interstate,” Mr Raine said.
When it comes to selling their home, Mr Raine said it is vital for downsizers to ensure that their property is pleasing to potential buyers.
“The sale of your family home may be full of memories which can be difficult to let go — however, you only get one first impression with every potential buyer therefore decluttering furniture and other trinkets can create a greater sense of space and help keep the property neat,” he said.
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Photo by @shvetsa on Pexels
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