Sydney couple Corinne and Peter Collins are downsizing from a five-bedroom house to a three-bedroom apartment in Wahroonga. (Source: Supplied)
A growing number of Baby Boomers are planning to downsize to boost their retirement funds, new research has found. The cost of a comfortable retirement has hit a record high, which may explain why some are trading in their family home to free up some extra cash.
Property developer Capital Corporation conducted a national survey of Aussie adults who own a home and planned to downsize in the next five years. It found 56 per cent of downsizers intended to move to a smaller home to free up money for their retirement and reduce housing costs.
Sydney self-funded retirees Corinne and Peter Collins are preparing to downsize from their five-bedroom house to a three-bedroom apartment on Sydney’s Upper North Shore. The couple told Yahoo Finance money wasn’t an issue for them, but the extra cash would give them an added boost to enjoy their golden years.
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“The extra capital we will get from selling this place and buying the unit will enable us to travel overseas or to go and see things in Australia,” Peter, 75, said.
The couple’s current home in Wahroonga also has three stories and 38 stairs, which Corinne, 72, said was a major factor in their decision to downsize.
The couple recently purchased their off-the-plan apartment in the same area at the Residences of Wahroonga Estate for just over $2 million and they are expecting to move in at the end of 2027. They are hoping to sell their current home for around $3 million.
“That gives you a bit of scope to work out that we’ll have a bit of cash to live on, along with our self-funded retirement pension,” Peter said.
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The couple were keen to downsize from their three-storey house and say the extra cash will go towards their travels. (Source: Supplied/Capital Corporations)
Capital Corporation’s research found 40 per cent of respondents in NSW and the ACT wanted to downsize to an apartment. A similar number of Baby Boomers hoped to relocate to a two or three-bedroom apartment.
One in four of those surveyed planned to scale down to a property within the same price bracket as their current home, with 16 per cent expecting to spend between $1 million and $2 million.
Capital Corporation director Jim Hunter said many of the apartment complex’s buyers were empty nesters, looking to “improve their quality of life” by downsizing from their family home.
The Association of Superannuation Funds of Australia found that a couple would need to budget $76,505 a year to fund a comfortable lifestyle, while singles would need $54,240 a year.
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Budgets have hit record levels, up 3.5 and 3.6 per cent respectively over the year, as prices rise across food, energy and health
Along with unlocking equity in your home, the other main financial incentive to downsizing is the government’s downsizer super contributions. This allows you and your partner to each put in up to $300,000 from the proceeds of the sale of your home into super.
ATO data shows about 15,800 downsizers contributed $4.165 billion to super in the 2024-25 financial year, with super fund HESTA seeing downsizer contributions increase by 44 per cent from 2023 to 2024.
Barriers to downsizing remain
While downsizing can unlock housing equity and boost your super, there are major barriers that continue to stand in the way of some Aussies looking at making the move.
National Seniors Australia found that stamp duty costs, the cost of moving, and a lack of suitable housing alternatives were key barriers.
The Age Pension assets test is another obstacle, with Aussies not wanting to lose their pension or have their payments cut due to proceeds from the sale of their home. It’s something both National Seniors Australia and the Retirement Living Council have been pushing to be reformed.
Other Aussies, of course, simply don’t want to downsize. AHURI research found about 39 per cent of people over 75 had already downsized, but another 39 per cent said they would never consider downsizing.
While Corinne and Peter are self-funded retirees, they shared they paid nearly $97,000 in stamp duty on their new apartment. They also looked for some time for a suitable place to move into.
Once they move in, Corrine said she’s looking forward to being able to close the door to the apartment and not worry about getting someone to look after the garden or feed the fish when they go travelling.
The couple are also happy to be staying in Wahroonga where they will be near their kids and grandkids, and close to the hospital, dentist and shopping centre they are used to.
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