By Danielle Jenkins
Need To Downsize
The last couple of years have seen exceptional performance in the housing industry, with increased investor demand driving markets in the eastern states. Buyers have been paying eye watering prices for property, with even first home buyers jumping into million-dollar property purchases. But that kind of rapid growth can only sustain itself for so long and it’s expected that double digit growth will be a thing of the past as 2018 unfolds.
With housing prices anticipated to increase by only a few percent this year and probably less in 2019, homeowners can start to breathe out and revisit their plans. With rampant growth now slowing or slowed, if you had been considering downsizing your property before, now is the perfect time for you to sell that big empty family home, cash in on the profits and upgrade your lifestyle!
A lot of homeowners considering downsizing choose to wait it out in a rapidly rising market, through fear of loosing purchasing power while searching for the next home to buy. However, with 2018’s anticipated slower growth, now’s the time to take the leap. Theoretically speaking, you will already be in front as a downsizer, by selling a larger property to buy something smaller. However, with the rate of 2018 prices growth expected to be less dizzying, you’ll experience significantly less pressure to make your next purchasing decision quickly.
Of course there are risks to selling before you buy of course, but you’ll certainly feel less pressure this year.
The chief concern is that choosing to sell the family home in a hot seller’s market may make it difficult for you as a buyer. In a rapidly rising market, downsizers sometimes watch their purchasing power rapidly erode as they hunt high and low for a suitable smaller property. If that takes six to eight months, prices might change quite a lot. One solution might be to put all of your worldly possessions into a storage facility to take that overseas trip you always dreamt of.
Many downsizers also underestimate the time it takes to sift through decades of life’s belongings and scale them back to fit into a smaller home. It can be impossible for many to combine strolling down memory lane with the biggest spring clean of their lifetime, all within an unexpectedly short settlement period.
The Australian market is traditionally pretty stable and predictions for the coming years are good, with great opportunities in areas you may not have considered. So, if you downsize now and move to an area that holds great promise for capital growth, you might even get a surprise windfall in a couple of years. Markets in Western Australia, Queensland, South Australia and Tasmania are currently offering excellent opportunities for those looking not only for great investments, but a richer and more affordable lifestyle to enjoy the next stage of their life in. There are also existing and emerging tax benefits for those approaching retirement that should not be overlooked.
The key strategy is to get informed, get advice and shop with a keen eye. Despite your great sale result, there are still bargains to be had and with tighter lending standards in place reducing competition from investors, you’ll have the competitive edge to get in on great properties as the market shifts.