Society is great at coming up with names to capture the mood of the moment. “Nimbys” (not in my backyard) is a favourite for those who don’t want progress, and then there are the “empty-nesters”, describing parents whose adult children have left the family home.
The latest phrase doing the rounds in real estate is “rightsizing”, used to describe older individuals and couples who reject the idea of being an empty-nester but seek to scale back so they can enjoy life more.
Increasingly, this “rightsize” demographic is putting their family homes on the market and embracing the lifestyle of luxury apartment living.
More frequently, this strategy is known as downsizing and it’s a path many of us take in our later years when we feel our family home has become a burden without the noise, fun and activity of our children. Also, it’s a solid lifestyle strategy that allows you to take cash out of your real estate asset to help fund your retirement.
As an experienced agency, we’re seeing increasing numbers of empty-nesters seeking to change their lifestyle as they approach semi- or full retirement.
A new report from Knight Frank suggests these folks now dominate activity in the top 5% of the luxury apartment market. It says they have ignited a price surge in so-called super-prime ($10m+) and prime apartment sales.
The pipeline of these apartments coming on to the market is also getting crunched. The report says building activity isn’t keeping up with demand, and that will result in a near-40% fall in the availability of luxury units within three years.
If you’re thinking of downsizing in the near term, it’s fair to ask how this might impact you. Here’s a snapshot of the likely impact:
Prices to rise
There’s nothing new here, though. New apartments have grown in value by more than a third since 2015. Except for Sydney, this category’s value has risen faster than that of established apartments in every capital.
Supply to remain tight
Fewer sites are being allocated for big apartment buildings in cities for lack of space. It’s been this way for almost ten years. Also, the luxury apartment category of quality stock that is owner occupied is tightly held. So don’t expect many For Sale signs.
Act quickly
There are pockets of Australia that buck this trend, such as the Gold Coast. But it’s fair to say you’ll need to move quickly if you want to right-size to a luxury apartment to avoid even steeper prices in any market.
Check location
As an experienced agency, we believe it’s important to say that these macro-trends outlined by Knight Frank are not universal. Australia isn’t one giant market but thousands of small ones, each with its own profile and dynamic. If you want to find out the reality of your target suburb, we’d be happy to help you understand how our local market is performing in this regard.
We can help
If you’re seeking to sell your home and rightsize, we’d love to help. We can discuss local price trends for your style of current home, what would be required to get your current home ready for sale and share with you our off-the-plan and luxury apartment options to help you navigate the transition smoothly.