What is a downsizer?
The dictionary definition of a downsizer is:
“a person who moves to a smaller property, typically after he or she retires”
At Rose and Jones we see this group of people as having an important impact on property prices, particularly in the Eastern Suburbs of Sydney.
Looking at census data we can see that there were 62,239 people over the age of 65 in the City and Eastern Suburbs. And this population segment is growing, for example from 2011 to 2016 the largest population change in Woollahra was an increase in people aged 70-84, of 1,038 people.
|Electorate||Population (2016)||% over 65 (2016)||Number of people over 50|
|City of Sydney||240,229||8.2%||19,699|
What is the current state of the downsizer market in the east?
Increasingly often we see the following situation. Families who have lived in large houses in the Eastern Suburbs and bought their families up there. The children have now grown up and left home and the parents decide that a big house with large amount of land is too expensive and cumbersome to keep. They don’t need the hassle of big houses requiring ongoing maintenance and they want to travel more. They want to downsize into a big, high-end apartment, with at least 3 bedrooms, concierge, secure parking, luxury amenities like a pool, gym, and they can lock up and leave when required. In the absence of these offerings, downsizers are turning to terraces and townhouses.
Melbourne provides this accommodation really well, however in Sydney there is virtually none of this. As a result people remain in their big houses resulting in a lack of stock for families requiring those properties. There is literally nowhere for them to move to.
Various local councils need to change their planning laws to allow and incentivise developers to build accommodation geared to the downsizer market. Note, this is not retirement aged living facilities – these are luxury developments that meet the needs of people who have lived in beautiful $15m+ homes.
In areas where downsizers can afford a luxury apartment there are limited options due to very tight DCP’s (Development Control Plans) which do not cater to the needs and requirements of the downsizer. This can create a generational effect on property whereby the young family wanting to buy has limited options because the empty nester has nowhere to go. By limiting the number of apartments through FSR and height limit it is not allowing for the highest and best use of that site. Land owners and/or developers then hold on to the land/property and generate passive income until it is possible to develop into what they want at a later date.
What are the current trends?
One shift we have seen for a while now is increased demand from downsizers for terrace houses in Woollahra and Paddington. Downsizers are looking to terraces to provide the easy lifestyle and lock up and leave convenience. Terraces on streets surrounding Queen Street shopping village are very desirable for downsizers. They are minutes walk to cafes, restaurants, shops, and Centennial Park. This is a trend we only see increasing over time.
What does this mean for the market?
The necessity for families looking for big homes on large blocks of land to work harder to uncover quality properties. Often these properties will need a renovation.
Increased demand for terraces in Paddington and Woollahra from downsizers.
The necessity for planners to change planning laws to incentivise developers to build quality luxury apartments catering to the downsizer market. This would free up stock for younger families, and provide downsizers with the quality product that they are looking for.
If you are a downsizer or a family looking for your family home, I would be happy to discuss this in more detail with you.