Downsizing baby boomers grabbing hold of the property market
5.5 million baby boomers are the most active players in the property market as they sell up the family home.
They are often looking to downsize once their children have moved out or are looking for something which offers more flexibility.
Downsizing with Ease Founder Lorraine Cox says downsizing “means a lot of different things to many people”.
“Getting rid of the large home, having a little bit of extra cash and just that freedom to pack up and go away whenever we feel like it.”
She tells Chris Smith most of her clients downsize to retirement villages.
Ms Cox says while moving to a retirement village “does seem expensive”, it cuts the cost of upkeeping a large family home.
She also says the age of people downsizing is “getting much younger” with people as young as 50 or 60 making the move.
“They don’t want to wait until their 70 or 80, they can see the benefits in freeing up, going to a smaller place and doing what they’ve wanted to for years.”
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Some baby boomers are unsure about the downsizing processes, concerned if they do take the plunge their pension payments will take a hit.
Department of Human Services General Manager Hank Jongen assures Chris this isn’t necessarily true.
Mr Jongen says the property you live in is exempt from a pension asset test, but the extra money you get if you do sell could be considered an asset.
“What a lot of people do is they downsize, and then it’s a question of what they do with the surplus.
“If they bank that, that money will be regarded as an asset.”
Mr Jongen is urging anyone who’s thinking of making an important financial decision, like downsizing, to contact the Department of Human Services.
“Depending on what you do it can have an effect on your pension.”
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