Downsizing – the need for diverse options
Research shows that a wide choice of home types can alter perceptions about affordability.
Shout out to developers: Downsizers are not a homogenous group. We continue to see study after study that shows retirees would like to downsize but lack of suitable housing stock is the hurdle that holds them back. But there are other reasons to add “diversity” to your housing mix.
Concerns over affordable options
In a poll conducted by Downsizing.com.au, we asked would-be downsizers why they hadn’t yet made the shift to a more manageable home. The number one answer cited by 43% of respondents was that they “can’t find affordable downsizing options”.
This gels with a 2016 report entitled Housing affordability – keeping a roof over our heads, from independent think tank, the Bankwest Curtin Economics Centre.
According to the report, the ageing of the population raises new challenges and opportunities in relation to housing options for older households. Most importantly, the report notes that Australia-wide, the availability of diverse dwelling sizes and types can temper perceptions of affordability.
Lack of diversity creates perceptions of high prices
Housing diversity obviously differs widely from location to location. In New South Wales for instance, 26% of homes have two or less bedrooms compared to 30% in Queensland and just 14% in WA.
Conversely, almost four-fifths of residents in Perth and Brisbane live in separate houses, compared to just 61% in Sydney. A far higher proportion of Sydneysiders live in units (26%) compared to Perth (9%) and Brisbane (12%).
Why does this matter? Here’s the thing. The study by the Bankwest Curtin Economics Centre found a housing market that offers diversity in housing stock can help to improve perceptions of affordability.
Surprisingly, the research found only 17% of Sydneysiders ranked housing as unaffordable. This is similar to the proportion of Perth respondents who ranked their housing as unaffordable, and slightly lower than Brisbane at 20%. That’s despite Sydney having the nation’s most expensive housing market.
In short, the study concluded that diversity of housing types can temper perceptions of affordability. A lack of diversity may exacerbate perceptions of unaffordability even in areas where home values are relatively cheap.
The key takeout
Clearly, diversity is an important feature for developers to bear in mind when pitching at downsizers.
Not only are downsizers likely to be made up of a diverse group of people from empty-nesters to baby boomers and retirees; buyers of all kinds like to be presented with choice. This improves the likelihood that your suite of home designs will meet the wish lists of different types of downsizers.
From an economic perspective, offering a diverse range of properties can overcome the affordability hurdle. The more you offer, the greater the choice, and the less that downsizers may regard the option of shifting to a more manageable property as something that lies beyond their budget.
Greg Oddy is Director of Sales and Marketing for Downsizing.com.au and SeniorsHousingOnline.com.au