The recent $3.71 million sale of a three bedroom property in Strathfield in Sydney’s popular Inner West demonstrates that capital-rich empty nesters are on the move, a trend that will continue when the rules for downsizer contributions into superannuation are expanded in July 2022.

 The well-presented freestanding residence 40 Oxford Road, Strathfield, was sold under the hammer by Mr Daniel Maiese and Mr Ross Musso of Raine & Horne Concord/Strathfield. This is the first time the family classic has changed hands since 1962. 

 Mr Angus Raine, Executive Chairman of Raine & Horne, said, “I have never seen in my 35 years in real estate more properties selling for the first time in 40, 50, 60 and even 80 years.

 “The strong returns produced by property markets around Australia have clearly provided empty nesters with the incentive to make a move.”

 Australian housing values grew 22.1% in 2021[i], an extraordinary growth rate not seen in 30 years.

 “Downsizers realise they must sell up to capitalise on this terrific growth probably even more than other vendors,” said Mr Raine. 

 The Federal Government is supporting older homeowners

 By scaling down their principal place of residence, empty nesters can also beef up their retirement savings by availing themselves of downsizer contributions into superannuation, Mr Raine noted.

 From 1 July 2022, Australians aged 60-plus and who have lived in their current home for at least ten years will be able to sell up and downsize into a more manageable property and use some of the sale proceeds to make a downsizer super contribution[ii]. Previously this benefit was only available to those aged 65-plus. 

The downsizer super contribution is limited to $300,000. But for couples who own a home together, each partner can make a $300,000 non-concessional (after-tax) contribution into superannuation.

“Taking advantage of downsizer super contributions is not only a fantastic way to turbocharge retirement savings tax effectively, but empty nesters can make a community contribution by freeing up their larger family homes for the next generation of upgraders,” Mr Raine said. 

 Getting back into the market with the help of Raine & Horne’s DigiKit

 For those empty nesters who haven’t been active in the real estate market in many decades, Mr Raine advises them to research the current market in their area and choose an agent who has the expertise and the tools to walk them through the sales process step-by-step. 

Mr Raine said, “The right agent will expertly reacquaint empty-nesters with the property sales process. To support this endeavour, Raine & Horne offers our first-to-market DigitKit an interactive digital platform that provides vendors with the entire A-Z of the real estate process.”

The DigiKit platform also provides vendors with live market information such as median prices and statistics about their local area and comparable properties, extracted from three external sites, including rh.com.au, CoreLogic and Google Maps. 

“Better still, time-poor vendors can submit feedback to Digikit that generates an instant notification to the mobile phones of our agents to ensure they can respond in a timely fashion.”

More tips for downsizing

Before embarking on the exciting journey of downsizing, there are a few considerations you should consider, such as:

• How much space do you need moving forward? Perhaps you need fewer living areas and bedrooms.
• Location, location, location. Which area do you want to move to? This could mean staying in your current neighbourhood and moving into a smaller property such as an apartment or townhouse, a tree change, a sea change or even relocating interstate.
• Emotional connection. The sale of your family home may be full of memories which can be difficult to let go. However, you only get one first impression with every potential buyer therefore decluttering furniture and other trinkets can create a greater sense of space and help keep the property neat. 
• How much can I afford? Consider what kind of property you want to move into and account for the costs associated with living there such as stamp duty, body corporate fees/strata levies, utility bills, council rates and insurances. 

[i] https://www.corelogic.com.au/news/peak-peaking-peaked-how-read-australias-housing-market

[ii] https://www.ato.gov.au/General/New-legislation/In-detail/Super/Flexible-super---reducing-the-eligibility-age-for-downsizer-contributions/