When are Canberra residents downsizing and what dwelling type is in demand?

For many Canberra home-owners over the age of 55, the concept of downsizing may come as no surprise. But, is this demographic of buyers downsizing later in life or has the lure of something more compact and manageable accelerated that decision?

According to a Domain analysis of the ACT’s population over the past 50 years, the proportion of residents aged between 57 to 66 has grown from 3.9 per cent in 1971 to 9.8 per cent in 2020.

Meanwhile, the proportion of residents above the age of 67, when the pension kicks in, has increased from 3.2 per cent in 1971 to 11.7 per cent in 2020.

“Basically, we have an ageing population and what we’re seeing is that the proportion of residents falling into the 67-plus age bracket has grown,” said Domain senior research analyst Nicola Powell.

A report from the Australian Housing and Urban Research Institute, released in 2020, surveyed 2400 households over the age of 55 and found that 26 per cent had downsized and a further 28 per cent considered downsizing.

Overall, the report pointed to a strong appetite among older Australians to downsize.

“I think the age in which to downsize is being pushed further, and there are a number of factors why that is,” Dr Powell said.

“We’re buying our first home and settling down a lot later in life, we’re having children later with the average age of a woman having a baby edging higher, and the affordability issues in the housing market are forcing children to stay home longer.

“The need to have a bigger home as children age into their 20s is much greater now than it was 20 to 30 years ago.”

The latest Domain House Price Report for the March quarter showed Canberra’s median house price reached a record high of $927,577, and the median unit price was just shy of its September record at $473,304.

Amalgamated Property Group development manager Michael D’Elboux said downsizing was “not about categorising downsizers by age, [but] segmenting the market for those looking for a lifestyle change”.

“Anyone that is looking for a long-term solution falls into this bracket, whether that be couples with grown children who have long moved out and are looking for a low-maintenance alternative, or perhaps right sizers with teenage or university-aged children at home looking to add convenience and amenities,” he said.

“The latter is becoming quite common so that everyone in the family can focus on what they need to without home-life adding more strain.”

Regarding the type of dwelling downsizers are looking for, there’s no “one size fits all, nor does one budget fit all”, Mr D’Elboux added.

“It really depends on personal preferences and circumstances,” he said.

“Some prefer townhouses but then realise upon further thought that stairs might not be the right fit for them long-term.

“Larger apartments are very popular and offer more choice for outlooks. At the end of the day, a great floor plan is the crucial factor of a downsizer’s decision-making process, not just the style.”

According to data from the Australian Bureau of Statistics, townhouse building approvals increased in the ACT in 2020 while unit developments saw a decline.

There were 1395 townhouse building approvals in Canberra in 2020, an increase of 21 per cent over the previous year.

The number of approvals is almost back to 2016 levels when townhouse approvals were at its peak. As for unit building approvals, in 2018, they were at a record high of 4452, but that has since declined to 2174 approvals in 2020.

Amalgamated Property Group currently has three apartment developments across the capital – including The Griffin on Constitution Avenue, Kiara in Narrabundah and Oaks in Phillip – that have been popular among downsizers, Mr D’Elboux said.

“The developments were designed for any buyer at any stage of their lives. We want to provide homes that offer different lifestyle choices for downsizers,” he said.

“Of course, the home interiors are crucial, but we’ve also provided large outdoor green spaces, generous space between buildings for privacy and plenty of amenities in our current projects; we believe apartment living isn’t just about what’s inside your four walls.”

Mr D’Elboux said the downsizers he’s been seeing have prioritised lifestyle and function when hunting for their next home.

“It used to be commonly thought that apartment living meant compromising on too much – outdoor space, flexibility and privacy but that doesn’t have to be the case if they do their research and choose the right combination of location, development and developer,” he said.

“If they choose not to compromise on these and find the balance, apartment homes can have much greater benefits for wherever the years are going to take them.”