Downsizers becoming a force majeure in real estate market

Downsizers becoming a force majeure in real estate market

Peard chief executive Peter Peard said the real estate industry had traditionally focused on the needs of first-home buyers and families upgrading to a bigger or newer home.

“The demand for rezoned, higher-density land in established areas is set to surge due to the dynamics of the WA property market, which are rapidly changing because people are now living longer and families are getting smaller,” he said.

“In particular, the Baby Boomer generation that drove the demand for family homes over the past 30 years is now getting older and wanting to downsize.

“The reality is that this age group will rival first-home buyers in terms of their economic importance to the real estate sector over the next decade.”

Australian Bureau of Statistics projections for WA showed the proportion of people aged 65 years and older in the population would rise from 10.3 per cent in 2006 to 15.9 per cent by 2026.

The ABS also projected the proportion of the WA population aged 15 and under would fall from 22.7 per cent in 2006 to 20.5 per cent in 2026.

“We are finding that many of these downsizers want to live in an area close to their current home, which generally tends to be in established suburbs,” Mr Peard said.

“This trend has seen a big growth in the number of higher-quality apartment developments, especially in the western suburbs and along the coastal strip.

“There has also been an increase in smaller boutique apartment developments in established suburbs closer to the city.”

Mr Peard said with the State Government committing to increasing density levels in established areas to reduce urban sprawl, he expected apartments and high-density developments would become more commonplace over the coming years.

TIPS FOR DOWNSIZING

n Get an appraisal on your existing home to get a clear indication of what you can afford to buy when you downsize.

n When choosing to buy off the plan, check the track record of the developer to find out if they built to schedule and if they delivered to standards, price and specifications as promised.

n When buying in a multi-unit development, check the selling price of similar homes that are at least one year old in the same area to get a better indication of the true market value of the property you’re interested in.

n Apartments in smaller boutique developments with features such as a double garage tend to have greater resale appeal, especially if they are in a prime location near the city or ocean.

n Apartments with large balconies and good views are generally in greater demand because of the focus on outdoor living in WA.

n Check for major redevelopment in near-city areas. Same areas have plans for major new shopping developments, which could enhance the value of properties.n