The term ‘downsizing’ has become synonymous with over 50s cashing in on large homes to fund a more comfortable lifestyle. The reason most of you will consider downsizing is to improve your financial position. Many of you may have capital tied up in your home, so it makes sense to release it and enjoy having the extra cash to improve your standard of living.
But what does ‘downsizing’ really mean? Is it as simple as selling high, buying low, and pocketing the difference? What are the pros and cons of downsizing?
Downsizing means less time and money spent maintaining your home, having extra cash on hand for emergencies or some of life’s luxuries, or eliminating a mortgage or debts. There are some considerations, too, such as how it may affect pension eligibility, tax and income, or the challenges of finding a new neighbourhood in which to live – but some may also find this exciting.
A recent survey revealed that more than half of Australians over 55 are open to downsizing, but the main barrier to moving to a smaller home is a lack of housing that matches the diverse needs and preferences of the rapidly increasing number of older Australians.