How to decide when it's time to downsize
As the old saying goes, life's only inevitabilities are death and taxes.
In the world of real estate, we're facing not death but a so-called “silver tsunami” of aging owners who want to downsize or move into a retirement village.
The need for our seniors to leave their family home is often hampered by transaction levies, such as stamp duty.
When seniors do the sums, many recoil at having to give the taxman hard-earned cash simply to move to a smaller residence. Consequently, the flow of family homes coming onto the market diminishes, contributing to higher prices.
Inevitably, most seniors can only delay the decision for so long.
The Retirement Living Council says the number of Australians aged over 75 will rise by 85 per cent over the next decade to 710,000. It worries about the availability of suitable accommodation to cope with this “silver tsunami”.
It says 67% of development applications for retirement village developments take more than 365 days to complete, and 23% take more than 730 days.
The time-lag in developing new retirement facilities suggests that we all need to think ahead. For those with a timeframe in mind, it's more essential than ever to make a plan. You need to understand the value of your existing property and the best way to sell it to meet your deadlines.
Below are some of the issues our clients have had to consider when making the decision to downsize or move to a retirement home:
Lifestyle and Social Needs:
- Low-Maintenance Lifestyle: Are you looking for a community where home maintenance and upkeep are taken care of, allowing you to focus on enjoying your retirement?
- Social Activities: Do you crave more social interaction and opportunities to participate in group activities, clubs or events? Retirement villages often offer a vibrant community life.
- Sense of Community: Do you want to live in a community where residents might have similar interests and life experiences?
Health and Care Needs
- Your Needs: Consider your current health and any potential future care needs.
- Proximity to Healthcare Providers: Is the retirement village conveniently located near hospitals, clinics and other healthcare facilities?
Financial Considerations:
- Affordability: Can you comfortably afford the entry fees, ongoing fees and any additional costs associated with living in a retirement village? It's crucial to understand the financial implications.
- Ownership Structure: Is it a freehold, leasehold or a licence to occupy? Each option has different implications for your rights and financial commitments.
- Cashing Out: Be aware of any exit fees and resale conditions.
