Why the pandemic won’t stop the growing tide of downsizing across Australia

Every time Sydney art dealer Denis Savill visited his doctor, he was told he should be checking in for a knee replacement. But last time he called by, he told his medic he had good news: he no longer needed the op.

“What do you mean?” asked his doctor, puzzled. “Well, I’m downsizing,” Savill replied. “And into a building with a lift.”

Australia’s more than 4 million Baby Boomers – as well as others, such as Savill, born before 1946 – are now either actively undertaking, or considering, downsizing from a big family house into a smaller home, townhouse, villa or apartment.

While COVID-19 has momentarily reduced the pace of the trend, the long-term attractions are obvious: one-level living for creaky knees with lifts up to apartments, less maintenance on well-worn houses, fewer hours every weekend spent gardening, hopefully, better security and then, with it, the ability to simply lock up and leave whenever we’re all allowed to travel again.

About 70 per cent of those following the drift are staying in the cities but sidling a little closer to the city or to lifestyle areas, while 30 per cent are seizing the opportunity to shift further out to the coast, the country or the mountains.

For Denis, 81, and his long-time partner Anne Clarke, 65, the move is from a big house in Bellevue Hill in Sydney’s eastern suburbs to a rather large penthouse apartment on the top floor of a new block in Woollahra, four kilometres away. It follows Denis selling his art gallery in Paddington recently and finally making the decision to retire.

“Bellevue Hill is famous for its trees, and I had them hanging over my swimming pool, which wasn’t a good mix,” he says. “So, the pool took a lot of work and chewed up a lot of power. Also, I’ve got to a certain stage in life when I don’t want to be doing work around the house.

“I’m now retiring too, even though I’ve probably left it a bit late. I wanted somewhere I could leave when I wanted, to visit Queensland and Victoria.”

He had a clear idea of what he wanted his downsizer home to be like, and when he was shown the three-bedroom, 214-square-metre apartment by The Agency’s Ben Collier, he loved the quality of its light – all the better for displaying his art – the height of its ceilings, its security, its French style and “the extraordinary happy feeling about it.”

The major challenge was always going to be what to do with the art he no longer has space to hang. “But I wanted it so much, I paid $2 million over the reserve,” he laughs of his $7.55 million purchase.

Collier says the major difficulty for downsizers today is the lack of suitable stock. There’s no shortage of families wanting to buy the big houses they’re going to vacate, but what do the sellers replace them with?

“The apartments they want have to have lift access, a good floor plan, plenty of storage and excellent security so they can lock up and leave them,” he says. “They’re all features for developers to consider for this market because, today, there’s just not enough high-end luxury apartments for downsizers to choose from.”

Price, for most people, is obviously a factor in the move, and some are loving the fact that now the gap between the median price of a house in Sydney, at $1.41 million, and that of a median-priced unit in Sydney, at $786,000, is at an all-time high. The average unit now costs just 55 per cent of the price of a house, which is great news for those leaving a median house to relocate to a regular unit and being left with a big cash windfall.

Others, however, are plainly shocked that their beloved ramshackle old place is actually worth just about the same – or sometimes even less – as a schmick new apartment with all the dressings, like a pool, a gym, rooftop barbecue and landscaped gardens.

Belle Property Mosman principal Tim Foote had a downsizer recently who sold his house for $4 million and then bought an apartment for $8 million. “But he’s over the moon with it,” Foote says. “I think a lot of people, however, are surprised that when trading an old house for a new apartment there isn’t such a big gap between the prices, as it’s not really like for like.

“People have an old, tired house they’ve lived in for years but don’t want to do work on, but then they want a beautifully presented new place instead. The difference in price isn’t usually as large as they’d expect.”

Sometimes it can be, though, Foote says, especially if downsizers are in the 30 per cent who are moving from Sydney to out of town. Then, they have the chance to finally get rid of their mortgage or have money left over from the exchange to help out their kids or to spend their inheritance on travel and living large.

Yet, the main challenge is always the same: decluttering and reducing possessions, whether art or furniture, to fit the new space. Michael Brown found that particularly difficult when he and his wife Janet, both now 79, moved from their big family home of the last 50 years in Katoomba, with its granny flat on the back, into a retirement village in Lithgow.

“We tried to refurbish the house to make it easier to live in, but it was just too big, and we didn’t want to spend time having to do repairs and gardening,” says Michael, the father of two daughters and grandfather to four. “But getting rid of so much was challenging as even selling through the local paper is hard, and charities often are very selective now.

“But we were ready to downsize, and after spending 12 months looking around, we saw a renovated two-bedroom villa at Kirkley Gardens and loved it. We are now very happy here and very contented. It’s a nice community and, while we all have our privacy, we’ve got to know everyone too, with drinks and nibbles held in the village for us all every month.”

That social aspect tends to be very important for downsizers, believes Downsizing.com.au chief executive Amanda Graham. “People don’t want to be socially isolated as they get older,” she says. “They don’t want to be in a suburb without friendly neighbours. They want to live in places where there are more lifestyle facilities, more socialising, and cafes and restaurants and things to do.

“There’s a big move to homes where people can live comfortably and not feel like it’s a downgrade. It might be a villa or an apartment, and I think a lot of developers are now designing apartments for that demographic, with perhaps three bedrooms and maybe a second living area or place to work remotely from.”

The COVID-19 pandemic has temporarily slowed the downsizing movement as uncertainty about inspecting homes has hit that demographic hard. In addition, many who were used to being empty-nesters are now having to cope with kids boomeranging back home to live, perhaps after losing their jobs in the pandemic.

“Also, older people who were considering retirement living are now often staying longer with their adult children because no one wants to be exposed to aged care in the current situation,” says social analyst Mark McCrindle, principal of researchers McCrindle.

“In tough times, like depressions or wars, we find people come together more in extended families, and this pandemic’s been no different. But in the long-term, downsizing is here to stay, and people will go back to that, although perhaps looking more for medium-density housing, rather than higher density.”

Buyers’ agent Rich Harvey, chief executive of Propertybuyers, has also seen a momentary slowing of the shift, with stock listings down during lockdowns limiting the ease with which people can buy other property to move into.

“The challenge for all the downsizers who are bouncing around houses too big for them now the kids have left home is finding suitable housing to downsize into,” he says. “They all want low-maintenance homes closer to lifestyle or the beach or shops, and often three bedrooms and a study. And they can be hard to find.”