W. Not one property fits all, but there is a trend where we see downsizers asking us to source an apartment. Once their children grow up and become independent and move out, parents are often left with a home that is either to big or requires to much maintenance. There are many reasons why they make this change in their lives. In this market insight, we highlight some of them.
Purchasing with a long settlement period
When buying off the plan, it can take time before the property is constructed. Depending on the size of the apartment building, the location and/or the financial capacity of the builder and developer, it can vary. It’s quite common that an apartment make take approx. 24 months or more to unfold. Downsizers have found this to be an advantage. It allows them to prepare their current home for sale. It also provides ample time to maximise an appropriate sales campaign to market their home and sell it at the best price possible.
You can secure a new apartment with a maximum deposit of 10% with nothing more to pay until settlement. In many cases, downsizers will use the proceeds from the sale of their home to purchase the apartment. This can even be a full cash purchase.
Downsizers can manage both the purchase of their apartment and the sale of the existing home without the time pressures that come with other property purchases. This additional time can be used to slowly transition into the new property, consider what personal belongings you want to keep or dispose too.
Taking advantage of their accumulated equity
As past performance shows, property increases in value over time. With the assumption that the downsizers have paid down or eliminated their mortgage, the proceeds of sale may be quite substantial. It often allows downsizers to purchase the apartment in cash rather than apply for a new mortgage. We have seen many downsizers take advantage of their accumulated equity by having extra money left over from both the purchase of the apartment and the sale of their existing home. With guided financial planning advice, downsizers make implement financial strategies, reinvest or look to enjoy a long extended holiday. We have also seen people use their money to help their children in some way too, from weddings, property deposits or even pre-bequeaths.
Change of lifestyle
Often downsizers purchase a home that is near a reputable school, within their affordability at the time etc. Their adult children may not afford or choose to live in the same area. Once they have grandchildren, it is common to see downsizers move for lifestyle reasons. They may want to live closer to their grand children so they can help care for them when needed. Other circumstances may be that downsizers want to live in an entirely different area where they can enjoy the amenities they now have time for. That may be near a golf course, beach, in the city with a view or in a building that caters for a number of internal facilities such as yoga studios, gymnasiums, swimming pools, roof top terraces etc.
As younger people, they may have outgrown the area they lived in when raising the children. They may be gravitated to live closer to long life friends. They may also want to buy an apartment so they have more time to do what they want over looking after the upkeep of the home. An owners corporation is often responsible for keeping the communal areas clean, safe and tidy. Downsizers appreciate the fact they don’t have to worry about these domestics.
To own a home that meets their needs
To own a home that meets your need today can be vastly different to what you wanted or needed 5-10 years ago, let alone 15-20 years ago. When raising a home, you are likely looking for large internal floor plans, bigger outdoor areas and 4-5 bedrooms. Once your children move, you likely want different things that make a home functional for you. You may be happy with 2-3 bedrooms, you may want a balcony over a back yard, you may want high-end fixture and fittings, you may want one car space over two. No matter what the differences are, when buying off the plan, you can look to purchase an apartment that caters your needs today.
If you buy early enough, you may be able to make some changes to the layout. You may want to create a sophisticated office space, a theatre room or an additional powder room. Of course this is subject to what you want to spend and also what the developer/builder are capable of doing. The apartment space may be to confined to make some of the desired changes. Careful consideration to your personal circumstances is essential when picking the right apartment. You may prefer a boutique sized building with less that 25 units over 150 units. This may offer a quite atmosphere as apposed to a high rise that has a high level of foot traffic. However you may want a high rise to make the most of a city view or waterfront. No one has identical objectives, so make sure you write down what you want and need.
Increased security levels
Modern apartment living has implemented some advanced security. With CCTV cameras, secured lock up basements, video intercoms and concierge services, its difficult for an unwanted guested to arrive at your door step. These buildings also often feature alarmed main entrances, restricted elevator access and dead-locked apartment doors. You will also find comfort with modern smoke alarms and other technological measures.
As you mature in age, having closer neighbours can also be a helpful. If you are unwell, injured or in need of urgent assistance, you may have many options to cater your situation. This is something you may also reciprocate within your community.
Lower property maintenance
Having a larger home generally requires a high level of attention and maintenance. Some owner occupiers love spending out time, but for many downsizers looking to travel or spend time away from home, lower property maintenance is a big plus. As you age, you may find it overwhelming to maintain and upkeep your large property (both inside and out).
Buying an apartment off the plan apartment introduces you to brand new plumbing, electrics, fixtures and fittings. This will offer you longevity in the home and lower property maintenance. You will be provided with a variety warranties including builders warranty insurance.
A more comfortable financial situation
Downsizers often choose to buy an apartment on the basis that they can extract more proceeds from the sale of their existing home. Apartments are generally cheaper to buy in comparison to a townhouse and stand alone home in the same area. This allows them to buy in a location of their choice, but also allows them to retain more money from the sale of their old home. This provides additional financial comfort going forward.
What should I do?
Before buying a property, we recommend seeking professional property advice. At Crest Property Investments we specialise in sourcing brand new and off the plan properties for buyers. We also do not charge fees to buyers! If you’d like to learn more, please feel free to contact us. We welcome the opportunity to help you make the best property decision. If you’d like to learn more important tips associated to apartment living, please feel fee to visit our YouTube channel or Market Insights page on our website..
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
December 2021
