Embracing Downsizing: navigating demographic shifts and housing dynamics in Western Australia

Downsizing is becoming a crucial segment of the property market in Western Australia and elsewhere in Australia, driven by demographic shifts and changes in household composition.

The population is aging, and there's a move towards smaller families, which influences the demand for smaller living spaces that cater to the evolving needs of households.

Recent Census figures indicate a significant aging trend in WA, with the median age climbing from 25 in 1971 to 38 in 2021. Baby Boomers, ranging from 55 to 74 years old, make up a significant portion of the demographic.

As the number of people living alone or as empty nesters increases, there's a rising demand for smaller, low-maintenance homes. This trend contrasts with the prevalent type of housing in Perth, which typically consists of standalone houses with three or more bedrooms on large plots.

This mismatch between the market's supply of homes and the trend towards smaller households highlights a critical issue amidst WA's ongoing housing supply challenges.

There's a consensus among government and industry stakeholders on the need to provide a broad spectrum of housing, from affordable to luxury options. However, there's also a pressing need to diversify housing types, including more medium and high-density apartments, to address both current and future housing demands.

Research indicates that around 190,000 individuals in WA are considering downsizing to a smaller home within the next couple of years, predominantly those aged 60 to 70. Most of these individuals currently reside in larger homes and are looking to move to more modestly valued properties.

Downsizing presents a substantial financial opportunity, potentially releasing an average equity of $390,000 per household, which can significantly contribute to retirement funds. The government supports this transition, allowing eligible individuals over 55 to contribute a portion of their downsizing proceeds to their superannuation, enhancing their financial security in retirement.

The appeal of downsizing is evident, offering both financial benefits and a more manageable lifestyle. However, the challenge lies in the scarcity of suitable downsizing options in places like Perth, where larger homes dominate the market.

Addressing this complex issue requires multifaceted strategies, including governmental initiatives to reduce bureaucracy and expedite the approval processes for new developments.

Furthermore, the decision to buy a new home before selling the old one or vice versa involves considerable financial and logistical considerations, underscoring the need for strategic planning in this transitional phase.

The Western Australian State Government is actively working towards increasing urban density and development along key transit routes and within central hubs, aiming to provide more diverse and accessible housing options.

If you find yourself in the situation our next move service will get you from the current home to your new home stress free, speak to our team today for more information: 0438 908 264.

Paulette Contessi

Director / Licensee

CONTESSI PROPERTIES