Is now the time to downsize? Starts@60 spoke to those in the know.
So, you recently retired (or maybe you’re winding down at work and have retirement in your sights) and suddenly your large family home no longer serves you. With more free time on your hands, you’ve come to the realisation that you have mo need for all of those spare bedrooms, and frankly, you’re getting fed up with spending hours cleaning the house and maintaining the garden every week. You’ve spent months planning your next move. Downsizing seems like the ideal option — you’ll have less space to take care of and boost your retirement fund in the meantime.
But then the coronavirus happened, throwing a spanner in the works. Unemployment is at an all-time high, and as a result, property prices have taken a massive hit. So what does that mean for your downsizing plans? Should you hold off until the market recovers and you can make a decent profit from the sale of your house, or should you take advantage of the reduced property prices and snap up a bargain?
Starts at 60 spoke to some industry experts to find out their stance on whether now is the right time to downsize.
Rachel Lane, downsizing guru and author of Downsizing Made Simple
I expect that there are a lot of people contemplating what I am calling a ‘C-Change’ as a result of the Covid-19cCrisis. I think staying at home for such an extended period has got a lot of people reevaluating whether their current home is the best fit for their current stage of life. More time spent at home brings into focus a number of things for people who may have already been thinking about downsizing. The list of maintenance jobs that need to be done, and for those jobs that require tradespeople or contractors, the cost associated with getting them done. The ‘stuff’ that has accumulated in kitchen drawers, linen cupboards, spare bedrooms and garden sheds … I’m sure there are plenty of children who have or will receive the “come and get your things” phone call from parents as a result of the crisis.
When it comes to selling property, the current market with fewer properties available may create a better outcome than waiting – those holding off until spring could face tough competition if a flood of properties hit the market all at once. Downsizers who are downsizing in the same market will likely find that any movement in the value of their home will be reflected in the value of their new home. It’s also important to keep any “losses” in perspective. If the home has been held for more than 10 years then the odds are it is being sold for more than it was purchased for – in some cases it could be substantially more. While it may not be as much as you think you could have sold for a few months or a year ago, there is no guarantee that waiting for a few months or a year now will mean it returns to that value.
When it comes to getting bang for your buck, you should know that you can negotiate – many retirement villages and land lease communities will happily negotiate, whether it is on the price or the inclusions – i.e. you may be able to get upgraded finishes for the base price.