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downsizing: taking the step down

When reaching retirement one of the questions to consider is: where do you want to spend the rest of your life? 

Most Australians love their home and want to stay where they are forever. Many are more flexible and, according to research1, will consider downsizing due to: 

  • economic factors

  • lifestyle change

  • upkeep/maintenance difficulty eg garden maintenance

  • negative shocks eg widowhood, divorce, health concerns.

Surprisingly, few retirees are downsizing to free up money. In many cases, they are relocating to places which are closer to family or smaller than the house they had, yet similar in price. They are finding the physical demands of maintaining a large house and garden too much and are making a choice they believe will be for the long-term. They want the next move to be their final one.


One of the major obstacles to downsizing is the range of financial costs involved: agents fees, stamp duty, removalists etc can be prohibitive. 

The effect on the Age Pension which excludes the family home – has also dissuaded many from taking the step-down, as many of the financial concessions disappear.

what’s best for me?

Each person’s situation will determine what the best long-term solution is: health concerns, being close to medical care, mobility, and your personal, family and financial situations will affect your decision even before you start to think about the logistics of packing, cleaning and moving home. 

It will pay to talk to your family and other professionals, such as your doctor, lawyer and financial adviser before downsizing. There may be easier options to consider, and smart ways to protect your Age Pension from being affected. 

It’s a big move – and will be better if you have as much support as possible when making it.

1.Australian Housing and Urban Research Institute, Positioning Paper No150 Downsizing amongst older Australians, August 2012.
Productive Ageing Centre, National Seniors Australia, moving or staying put – Deciding where to live in later life, November 2009.
Judd B, City futures Research Centre, UNSW, WHAT OLDER PEOPLE WANT, Attitudes to Options for Improving Housing Efficiency and Liveability. 2012.

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