Introduction: Why Downsize?
Downsizing isn't just about moving to a smaller home—it's about optimising your lifestyle for your current stage of life. Whether you're empty nesters, preparing for retirement, or simply want less maintenance, downsizing can be liberating.
I've helped hundreds of families in St George make this transition. While it's an emotional journey, the benefits are significant: unlocked equity, reduced maintenance, better lifestyle, and the chance to be closer to what matters most.
Financial Benefits of Downsizing
Downsizing can significantly improve your financial position:
Unlock Home Equity: Moving from a $2M house to a $1.2M apartment releases $800,000 (before costs).
Reduce Ongoing Costs: Lower council rates, insurance, utilities, and maintenance.
Boost Retirement Savings: Use the Downsizer Super Contribution to add up to $300,000 per person to super.
Improve Cash Flow: Freed-up capital can fund your retirement lifestyle.
Pro Tips
- Speak with a financial planner before making decisions
- Factor in all selling and buying costs when calculating equity release
- Consider the impact on Age Pension eligibility
Downsizer Super Contribution
The Downsizer Contribution is a fantastic way to boost your superannuation when you sell your home.
Key Details:
Contribute up to $300,000 per person ($600,000 per couple)
Must be aged 55 or over (reduced from 60 in July 2022)
The home must have been your principal residence for at least 10 years
Contribution must be made within 90 days of settlement
Doesn't count towards your contribution caps
One-time opportunity per person (can't downsize again for this benefit)
Choosing Your New Home
Think carefully about what you actually need versus what you're used to having.
Questions to ask yourself:
How many bedrooms do you really need? (Guest room vs. spare room)
How important is outdoor space?
Would apartment living suit your lifestyle?
Do you want a lock-up-and-leave property?
What amenities are essential nearby?
Location Considerations
For many downsizers, location becomes MORE important, not less.
Key factors:
Proximity to family (especially grandchildren)
Access to medical facilities and specialists
Public transport (for when driving becomes difficult)
Walk-to shops, cafes, and services
Community activities and social opportunities
Familiar neighbourhood vs. fresh start
Pro Tips
- Visit potential areas at different times of day and week
- Consider your mobility needs now AND in 10-15 years
- Think about your support network – where are your friends and family?
The Emotional Journey
Downsizing isn't just a property transaction—it's an emotional journey. You're leaving a home full of memories.
Common challenges:
Saying goodbye to the family home
Sorting through decades of possessions
Adjusting to a new neighbourhood
Potential loss of independence (if moving to retirement living)
Coping strategies:
Give yourself plenty of time – don't rush
Involve family in the decision where appropriate
Focus on what you're gaining, not just what you're leaving
Take photos of the old home and create a memory book
Decluttering: Start Early
One of the biggest downsizing challenges is dealing with a lifetime of possessions. Start this process 6-12 months before you plan to sell.
The Four-Box Method:
Keep: Essential items you use and love
Donate: Good condition items others can use
Sell: Valuable items worth the effort (garage sale, Gumtree, eBay)
Dispose: Everything else
Work through one room or category at a time. Don't try to do it all at once.
Pro Tips
- If you haven't used something in 2 years, you probably won't miss it
- Take photos of sentimental items before donating/disposing
- Consider giving cherished items to family members now
Timing Your Move
Ideally, you'll sell and buy in a coordinated timeline. Options include:
Sell First, Then Buy:
Know exactly how much you have to spend
May need temporary accommodation or extended settlement
More stressful but financially safest
Buy First, Then Sell:
Move only once
Requires bridging finance or significant savings
Risk if your home takes longer to sell than expected
Simultaneous (Ideal but rare):
Align settlement dates
Requires good coordination and some luck
Understanding Retirement Villages
If considering a retirement village, understand the different ownership models:
Loan Licence: You loan the village operator money to occupy a unit. When you leave, you get your loan back minus deferred management fees.
Strata Title: You own the unit outright (like any apartment) and can sell on the open market.
Leasehold: You lease the land for a fixed period (often 99 years). Usually cheaper but different resale dynamics.
Important: Always get independent legal and financial advice before signing any retirement village contract.
Frequently Asked Questions
What age can you make a downsizer contribution?
Does downsizing affect the Age Pension?
Should I sell first or buy first?
How do I choose between apartment living and a smaller house?
Disclaimer
This guide provides general information only. Financial implications of downsizing vary based on individual circumstances. Always consult with a licensed financial planner regarding superannuation contributions, pension impacts, and investment decisions. Retirement village contracts should be reviewed by an independent solicitor.
