“The idea is to reduce the time you spend looking after your property and free up both time and money to finally do the things you enjoy,” a report in 2014 from Channel 9’s A Current Affair, explained. “As property prices boom, older Australians are taking advantage of the market and selling their homes for something smaller, opting for a simpler life and a healthier bank balance.”
At one time downsizing simply meant moving into a smaller home or indeed moving into a retirement village. In recent years, however, apartment living or ‘vertical living’, has become a real alternative to consider, with its own set of advantages.
The main advantages of apartment living are:
- independence, and
- maintaining an urban lifestyle if that is what you are used to.
Security is perhaps the easiest to understand. For instance, if you love to travel, you can basically just lock the door and go on holiday. You don’t have to worry about who will mow the lawn, or put out the garbage whilst you are away. If there is 24-hour security, as there often is with apartments, you can feel your apartment will remain pretty secure whether you are away for one day or for one month. Security is definitely a high priority for people entering a more mature phase of life.
Another aspect to consider in downsizing is lifestyle. Many baby boomers are used to city living and love it. They don’t want to have to go thirty or so kilometres away from urban surroundings when they downsize. If urban living is your lifestyle choice, then it appears that the vertical living option has a lot to offer for retirees because prime city landed property is simply not available or would make the costs prohibitive for continued city living.
Gary Kordic, Executive General Manager for development at leading retirement village operator Aveo, confirmed this thinking when he spoke to the press in 2016 about Aveo’s medium-rise development in Bella Vista some 30 kilometres from Sydney CBD. He said, “You have these great parcels of land for vertical living in areas that are too developed for the horizontal retirement villages.”
The land size needed for a vertical village is far less than landed property, and so they can afford to be in excellent locations.
This certainly seems to be borne out by the choice locations of other apartments designed for this age group. For instance, in Melbourne, Australian Unity has a retirement living building in Carlton, close to the Little Italy atmosphere of Lygon Street. Inspire Broadwater Central, is being developed roughly 100 metres from the beach, and an easy walking distance from major shopping zones in Southport, which is also home to the Gold Coast’s state of the art Gold Coast University Hospital.
According to Richard Cavill, developer of Inspire, “Convenience is very important and although medical, shopping and restaurant facilities are easily available in nearby Southport, we have also decided to have an extensive retail area here just an elevator ride away on the ground floor, offering key services that are important to the older age group, services such as a health and medical centre, a pharmacy, dentist, a food and shopping Emporium, and an upmarket restaurant.”
“Whether you are going into a smaller landed unit or an apartment, you should be downsizing for your own personal and financial freedom. Finding time for what you care about, instead of looking after a house that is no longer needed…You can make your life easier in retirement whilst remaining independent, by simply shifting yourself to a better space nearer to the things you require.”
In considering apartments, however, it is important to understand that some are operated and managed as vertical retirement villages, and come under the various legislations regulating them. Developments like Inspire Broadwater Central, however, are quite different as Richard explains, “This is a normal apartment development for the whole market, so you can buy your unit outright, sell it according to your desires and even rent it out for a long term lease. You own the unit, which is not the case in a retirement village.” The distinction is crucial in planning your financial future.
Rights of ownership, however, are not the only thing to consider in opting for a vertical retirement village or a ‘free market’ apartment. Although all the conveniences are at hand in a well-located free-market apartment, the management does not take on some of the health-related and care-related services found in retirement villages.
Another cost in considering downsizing is the ongoing cost of maintenance. Living in a home that you are not using the full footprint and amenities for, could cost you a great deal in energy and water bills. When the house had children in it, the consumption and need were there. Now that the numbers have shrunk, your outgoings may not have reduced in line.
Larger living arrangements are more expensive than smaller ones, but moving also costs money. Whilst, the long-term financial benefit of leaving your large home and fitting neatly into a small one could be great, the decision is more complex than at first appears from a financial perspective, so you should speak to a financial advisor before making any decisions about trying to create surplus cash by seeking an easier to maintain a property.
When considering whether to move from the family home or not, there are many factors to consider on the emotional and social plane. Big homes can be isolating, especially if they were once full. Ask yourself:
- Do you get to see your loved ones where you are?
- Is it easy to get to medical centres, shopping, and community events?
Your home should be close to the people and things you love. Often times the family home was close to the things that were important to the family unit, but once the kids have left, the things that once were driving factors for your location are no longer relevant.
Emotionally, downsizing can be a difficult thing to do. Your family home may be filled with great memories; Christmases, birthdays, anniversaries, graduations, laughter, and time spent together. However, these memories are not stuck to the home – they are stuck to you. When you leave, you are simply opening room for someone else to make memories in the space as you bring yours with you to your new location.
At the end of the day, whether you are going into a smaller landed unit or an apartment, you should be downsizing for your own personal and financial freedom. Finding time for what you care about, instead of looking after a house that is no longer needed, is important. Leaving your work to retire should not mean entering new work as a housekeeper. If you want more time, more money, and more access to the things that you need, then you should think about downsizing. But why not Downsize and Upgrade at the same time? Explore your options and you may find that a change of scenery is all you need to ensure the best retirement possible.