Having a healthy supply of property is essential for the overall mobility of the market, but some areas are struggling to provide the amount of homes that are needed.
SQM Research revealed that in October, the national number of property listings was down 0.1 per cent. Some capitals felt the pressure more than others, as Hobart and Melbourne saw stock levels fall 8.1 per cent and 9.6 per cent respectively from the previous month.
This is just one example of how the supply shortage is taking effect, but various property groups believe it’s downsizers who could hold the key.
1. Downsizers move into smaller homes
A report from the Australian Housing and Urban Research Institute (AHURI) titled ‘Downsizing among older Australians’ found that 43 per cent of people who moved after the age of 50 relocated to a property with fewer bedrooms. For some, this may have involved home loan refinancing, while for others it meant they freed up equity in their property.
This trend leads to a greater availability of larger properties – the type of homes that families often go in search of when they first get onto the ladder. As AHURI found, people generally want a property that’s low maintenance when they retire, which is why smaller homes tend to be higher up their wish lists.
2. Affordability concerns are addressed
There are also worries about the rising cost of property throughout Australia, which is another area downsizers can potentially help with. The Real Estate Institute of New South Wales explained that larger homes are generally occupied by empty nesters – namely those who have more space than they realistically need.
REINSW President Malcolm Gunning said: “There should be incentives to encourage them to sell and buy more appropriate housing.
“This measure should also increase supply of larger homes in established suburbs, improve affordability and stimulate better use of existing infrastructure.”
A greater provision of homes usually leads to increased affordability, and mobilising downsizers could well prove critical.
3. Opening up property options
The Property Council of Australia believes retirees should be given a wider range of ideas when it comes to choosing their retirement living options. It explains that while retirement villages are already home to around 200,000 residents, this isn’t the only choice people have.
Putting forward the idea of independent living in a smaller property may appeal to more people. It also gives anyone applying for their first home loan a wider scope of larger real estate to look at, leading to increased choice for both sides.
You can contact a Smartline Mortgage Adviser Jillian Clifford on 0433 119 151 for mortgage advice. Or complete our call request form and we’ll call you!