Tell-Tale Signs That It’s Time To Downsize
Downsizing is hardly a new phenomenon, but it’s one that’s had its fair share of headlines over the past few months.
The Federal Government’s biggest housing initiative in the 2021 Budget is aimed at encouraging more Australians nearing retirement to downsize from the family home by extending access to those aged over 60 to contribute up to $300,000 into their superannuation, freeing up more housing stock for younger families.
However, policy aside, there are some very practical and personal reasons why you might want to take a closer look at downsizing. Below are some of the indicators that now could be a good time to sell and move to a more manageable property, in order to free-up some funds.
Renovations and DIY getting you down?
Let’s face it, we’re not all big on the idea of fixing shelves and creaking doors. And whilst renovating a kitchen or a bathroom – or any other room – might outweigh the hassle of moving, moving might actually get you everything you need in a home, including less space, more modern fixtures and fittings, and more.
If you’re finding that you are spending more time maintaining your home than actually living in it, then downsizing could be the solution you’re looking for.
We’d all like a little extra money to retire on.
Bills, bills, bills
Bills are unfortunately a fact of life no matter where you live, but moving into a smaller home could help bring them down. Firstly, there’s the fact that heating and cooling a small property is more affordable, giving you year-round savings, you might not otherwise have seen.
Data from the Australian Bureau of Statistics (ABS) puts the extent of rising household bills into perspective. The group revealed that while in 2018-19, the average water consumption in Australia remained steady at 0.19 ML/household from the previous year, the amount spent on water bills went up 2 per cent.
While there might not be much you can do to reverse the rising costs of essential services, a smaller home will be cheaper to run and, if you decide to buy new, the property will be built to strict environmental standards to help bring costs down even further.
Freeing up cash in retirement
If a large home is no longer practical, then downsizing could well be the answer.
We’d all like a little extra money to retire on and releasing equity in your home could be one solution. The Association of Superannuation Funds of Australia revealed that in the June quarter of this year, couples need around $63,352 per year in their pension pots to enjoy a comfortable retirement. This figure stands at $44,818 for singles.
If like many people you fear you won’t have enough money set aside to make the most of your retirement, then it’s time to think about alternatives such as downsizing your home.
While you’re considering your budget parameters, it’s also the perfect time to start seeing what the market has to offer.
Empty nest syndrome
We’ve all heard of empty nest syndrome – that feeling of not quite knowing what to do with yourself once the kids have left home. A large property with very few residents won’t help your case, which is another reason to look more seriously at downsizing.
The latest Housing Income and Labour Dynamics (HILDA) Survey data shows that the average age a man leaves home is 23.1 years, or 24.2 for women. And while there was a rise in adult children ‘boomeranging’ back to the nest in 2020 due to the financial pressures of Covid19, a recent Finder survey has found that 43% have since flown the coup again.
Once your brood has gone for good, it’s the ideal time to turn your attention to the future.
Ready to start the downsizing discussion? Get in touch with our experienced team today to talk through the different options in Port Macquarie and surrounds. We’re here to help.