The middle price range of the Australian property market has become very competitive as empty nesters and families under financial stress compete with first home buyers, investors and younger families. This has come about through job losses, family separations, the GFC and simple lifestyle changes. However with increased demand comes increased prices, often wiping out much of the expected savings.
Empty-nesters and retirees, in particular, are now often faced with little or no extra cash left over after selling the family home and downsizing.
Ana Bennet, a property adviser from Lachlan Partners has advised that the strategy of freeing up equity from larger homes and downsizing does not always pay off.
“One problem with downsizing is that, while prices may have risen such that it is tempting to sell and unlock money, the prices for the kinds of properties you might want to downsize to have also risen,” Bennett says.
“In theory, it is a good idea but it only works if the new property gives the downsizers both the kind of swap in lifestyle and finances they are looking for,” Bennett says.
