Family homes a potential goldmine for downsizers says Raine & Horne CEO
Media release - 16th May, 2013
Sale of large homes can free up capital for retirees
Raine & Horne CEO Angus Raine says empty nesters swimming in large homes are now in the best position since 2007 to make the move to smaller properties such as apartments and townhouses.
“For many older Australians, the family home has acted as a quasi-superannuation fund for the last six years, as retirement savings tied up in superannuation have been ravaged by the global financial crisis,” says Mr Raine.
“However the worm has turned for the economy; confidence is back, interest rates are low, and younger buyers are looking to take the next step up the property ladder, yet there is a shortage of suitable homes to meet this demand.”
According to BIS Shrapnel’s Emerging Trends in Residential Market Demand Report – which examines trends from an analysis of census data over the last 20 years – 20-to-34 year olds are looking to move into their next stage in life, with many placing larger family homes in their sights.
However, the same report reveals no major evidence of an increase in the rate of downsizing among retirees aged 65 and above, which could impede younger generations from securing a larger family residence.
Yet Mr Raine says selling a family home is a tax-free transaction which older Australians can use to unlock a significant amount of capital tied up in the family home.
“A decision for retirees to downsize also provides a social dividend, as it will help address some of the housing shortages in many of our capital cities.
“I would encourage any empty nesters considering a property move to get their skates on or be swamped by a wave of retirees looking to downsize into smaller homes,” says Mr Raine.
In Perth, Phil Hayes, Raine & Horne’s WA-based Business Support & Development Manager, says that with new waterfront precincts such as Elizabeth Quay under construction, baby boomers will have abundant real estate choice in the nation’s west.
“Elizabeth Quay will create a magnificent 2.7 hectare precinct with shops, cafes, restaurants and other exciting entertainment venues, which will make it a great place to live,” says Mr Hayes.
For those seeking a more immediate move, Mr Hayes suggests that aspiring downsizers could inspect suburbs such as East Perth, South Perth, Burswood and Subiaco, which offer ample real estate options closer to the CBD.
“In East Perth for instance, it’s possible to secure a modern, well-appointed three-bedroom apartment close to the river, shopping and restaurants from around $620,000,” says Mr Hayes, who suggests that recent changes to zoning laws means developers also represent an untapped market for empty nesters.
“Recent changes to zoning laws in Perth have put developers in the picture for traditional family homes to be built on larger blocks,” says Mr Hayes, who is urging empty nesters to seek a free property appraisal from a real estate agent to gauge the latent value locked up in their properties.
“Many baby boomers realise that they are asset-rich but income-poor after retirement, and downsizing allows them to capitalise on their asset as well as free up some cash to potentially give them a better retirement lifestyle.”
According to Mr Varrica, many older vendors in Five Dock are doing just that, by selling up their long-time family homes and relocating to nearby apartment complexes, such as Abbotsford Cove and Kings Bay village.
“Modern, two bedroom apartments in one of these complexes start from around $600,000, and are the perfect choice for a local couple in retirement who want to change nothing but the size of their residence.”
In Queensland, Clark Brackenridge, Principal of Raine & Horne Surfers Paradise, is encouraging empty nesters to list their home after data from the Real Estate Institute of Queensland (REIQ) revealed that property sales on the Gold Coast jumped by 8% over the last 12 months.
Mr Brackenridge says sales volumes in the sun-drenched suburb are up by as much as 60% and much of the sold stock comprises residences priced at the top end of the market.
“Up until six months ago baby boomers were struggling to sell their homes in order to downsize, but the top end housing market has since picked up, meaning now is the ideal time to list.”
To illustrate this point, Raine & Horne Surfers Paradise recently sold three sub-penthouse apartments in the prestigious Grand Mariner building in Commodore Drive, Paradise Waters, for between $1.2 and $1.5 million each.
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For further media information please contact:
Angus Raine, CEO, Raine & Horne on 0409 920 697
Andrew Harrington, National Marketing & Communications Coordinator on 02 9258 5400