Is now the perfect time to downsize your home?

The median house price over the past few months has increased 9.3% (source: CoreLogic data) so we wanted to help answer whether now is a good time to downsize your home?

If you are buying and selling a similar-sized home in the same area then this information isn’t relevant, however, if you are looking to downsize your home then yes now is a perfect time – let’s take a look at why.

Most of the suburbs in the Illawarra have suitable options for those wanting a single-level, low-maintenance property that is close to shops and public transport making them great for those wanting to switch to a more convenient and easy lifestyle. We are so lucky to have access to great walks, cafes and restaurants, and beautiful beaches that it would be silly to move anywhere else. But it is important to decide to downsize your home at the right time, although it is different for everyone. There may be a time when the house becomes more empty, or the family has moved away so a ‘lock-up and leave’ property is much more desirable than one that is high-maintenance or awkwardly positioned to get access to.

Houses vs Apartments/Units

We are currently seeing a disproportionate increase in property prices between houses and apartments/units – 15.1% and 6.5% respectively. What this means is that for those living in a house and wanting to downsize their home, they are going to have a larger portion of money to put towards their next property purchase and invest in superannuation. In the most recent 2021 budget announcement, the Government announced changes to the superannuation scheme which adds an additional incentive to downsize now and boost super funds.

The Downsizer Super Scheme

To increase housing stock the government has stepped in and provided those wanting to downsize their home an incentive to help increase real estate stock levels. This incentive is the opportunity to make a tax-free contribution of up to $300,000 into your super fund if you are over 60. Previously it was limited to people over the age of 65, so this is a great option for those wanting to supercharge your retirement nest egg especially if you are a couple as you could potentially add up to $600,000 into your joint super. If you are now more seriously thinking it’s time to downsize your home then you can read more on how the federal budget superannuation changes could increase your nest egg, then read more on the ABC.

How to Downsize your home?

In this market, it is unlikely that you’ll have any problems selling your property – and you can potentially get an exceptional price. The hardest part of the downsizing puzzle at the moment is securing the right property, as there is a high amount of competition currently.

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There are two options with downsizing and each has its pros and cons – sell first, then buy, or buy first and then sell. What we are seeing happen a lot at the moment is purchasing first with an extended settlement and then selling while in this period. Although this seems stressful, having a good solicitor or conveyancer and agent working for you will mean you can have all the expert advice on hand to help the process go as smoothly as possible. Get in touch if you would like recommendations on a good solicitor or conveyancer and we will be happy to help.

Make sure you read our tips on how to get the property you want to help secure the right property over other buyers – it is important to be decisive to ensure you beat the other potential buyers when you choose to downsize your home. Know what you want, know what you can afford, and make sure you are quick to let the agent know. We also recommend signing up for our property alerts.

What does your money buy in the Illawarra?

It’s good to take a look at recent sales in your area to gauge how much your house will potentially sell for, and also where you are looking to purchase. Then you get a good idea of what you can afford and what you can add to your superannuation fund.

Contact us today if you’re looking to downsize in the Northern Illawarra or Wollongong and we can help.

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