All about downsizing (or rightsizing) your home
For many, the thought of downsizing is synonymous with downgrading, but it doesn’t have to be that way. In fact, to remove the negative connotations, many industry professionals are calling the process “rightsizing” your home, and it’s something that people of all ages may consider at some point in their lives.
Recent research from Martin North at Digital Finance Analytics 1 suggests that over a million people are contemplating downsizing in the next one to two years, with the Australian Financial Review putting the number of potential downsizers at 800,000 2.
The decision to downsize is a big one and it can be a complex process, so we’ve put together this short guide to give you handy hints and tips about how to streamline your home with minimum fuss and worry.
Why downsize?
The two most common reasons for downsizing are lifestyle changes and financial factors 3.
Lifestyle changes For some, maintaining a large house and garden becomes a burden they no longer want to shoulder. Others decide to move to a different area to be close to family, work or lifestyle locations.
In either case, the decision to move often means choosing to live in a smaller home. And it’s not just empty nesters and retirees who decide to downsize. Many younger families find themselves streamlining their housing choices so they can afford to move closer to work or into a specific school catchment zone or lifestyle region.
Financial factors Moving to a smaller home can also have significant financial benefits. The reduced costs associated with maintaining a smaller property, including lower energy bills and rates, can mean serious savings and selling a large home may also give you the opportunity to increase your cash flow or even live mortgage free.
For those aged over 55, new legislation brought in on the first of January 2023 also allows you to make a $300,000 contribution ($600,000 for a couple) from the sale of your family home to your superannuation, which has been touted as “an important way for Australians to boost their retirement savings.” 4
Whatever the reason for choosing to move to a smaller home, here are five important strategies to minimise the financial, emotional and practical impacts of downsizing.
1. Plan carefully
Understanding the process, planning ahead and seeking the best professional advice will set you up for a successful downsizing experience.
Chat to your legal and financial advisors, then turn to your trusted real estate agent to help you navigate the sale of your old home and purchase a new property.
If you sell your old home before you buy, you may need to find an interim rental property or storage facilities. On the other hand, if you choose to buy before you sell, you may need to organise bridging finance.
Planning your move is a highly personal process, and it’s something you should discuss with your advisors and family before you start the ball rolling.
2. Giving yourself time to declutter
Moving to a smaller property almost inevitably means having to part with some furniture and other treasured possessions that you have accumulated over the years. This can be a challenging, emotional process, and one you should give yourself time to deal with.
The earlier you start, the better. Be pragmatic and methodical, working through your home in small sections and deciding what you can’t live without.
Sell or donate pieces you are sure you won’t need, then consider placing things you are unsure about into storage until you are in your new home. Once you’ve settled in, you’ll have a better idea about what fits with your new lifestyle and what doesn’t.
3. Don't be afraid to ask for help
Moving out of your family home can be an emotional process. Family and friends can offer practical and emotional support and help you deal with some of the challenges of downsizing.
Sorting through belongings, celebrating your experiences in the home and talking about the future with them will help ease you through the process.
They can also offer practical help with packing, cleaning, rehoming excess furniture, or simply making a good cuppa on a difficult day.
4. Hire cleaners and professional movers
Professional services are also a huge help when it comes to the practicalities of moving. If you can, get professional cleaners into both your old and new homes to get them looking their best.
A reputable moving company is also a must, especially if you have large pieces of furniture. Some companies offer full-service options, which can take a lot of the worry and stress out of moving.
In any case, one thing you should do is pack a few small boxes of absolute essentials for your very first night in your new home. Bedding, toiletries, essential medications, a change of clothes and something to toast your move should do it.
If you do pack by yourself, make sure you label every box carefully and create an inventory as you go to help you find everything when you start unpacking.
5. Celebrate the move and be kind to yourself
You’re in! Open those essential boxes, toast your new home and start to plan for your future.
A house full of boxes and disorganised furniture can be extremely daunting, but by working in manageable chunks and calling on the help of friends and family, setting up your new home won’t be as hard as you think.
Be gentle on yourself and take as much time as you need to get to know your new space and make it your new home.
Summing up
For many, downsizing is a major milestone in life. Making the decision to leave your family home can be hard, but once you do, you are likely to enjoy the financial benefits and lifestyle advantages of your new home.
Careful planning and support from family, friends and professionals are essential to ensure the process goes as smoothly as possible.
1. https://youtu.be/lN6zl76ORQs 2. https://www.afr.com/wealth/personal-finance/winner-property-strategies-in-a-falling-market-20230109-p5cbb4 3. https://www.ahuri.edu.au/sites/default/files/migration/documents/PES-325-The-downsizing-preferences-of-and-opportunities-for-older-Australians.pdf 4. https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/more-australians-can-now-top-super-sale-their-home#:~:text=In%202023%20the%20eligibility%20age,when%20the%20kids%20move%20out.
Other buying, selling and investing articles and resources
Guide to property investment success in NSW
Selling a house or apartment in NSW eBook
Buying a house or apartment in NSW eBook
