A number of downsizers have moved into a new Sydney rental-only apartment tower after selling their homes, in a move which indicates the strong potential of leasing as an over 50s housing option.
In August last year, Mirvac launched its 315-apartment LIV Indigo development in the Sydney Olympic Park precinct.
The development is seen as a housing industry game changer, due to its size and the fact it is billed as the first residential community in NSW to be designed and built exclusively for renters.
At the time of the development’s launch, Mirvac estimated that around one in five of LIV Indigo’s apartments would be occupied by people over the age of 50.
Eight months on, and with 70 per cent of the building leased, in fact around 10 per cent of renters are over 50.
In an interview with Downsizing.com.au, Mirvac’s build-to-rent general manager Angela Buckley said some of the project’s downsizers had been able to release equity for their ongoing living expenses by selling their home and moving into the building.
She said these downsizers had been attracted to the building’s communal facilities and its dedicated and ongoing rental accommodation status, which gives them lease security.
“We’ve had good interest from downsizers,” Ms Buckley said. “In general, the downsizers seem to have a higher propensity (compared to other tenants) to secure longer-term leases, which seems to speak to the desire for certainty.”
We’ve found many of the downsizer cohort are looking for 3-5 year leases, and we’ve even had one inquiry for a 15-year lease.”
Ms Buckley said another trend was that downsizers were using the building to live close to their family, who either resided in the metropolitan area or even within the building itself.
“We’ve had residents with adult children moving into multiple apartments,” Ms Buckley said.
Another surprise is that the LIV Indigo project has attracted renters from right across the metropolitan area.
“We’ve got a wide range of ages in the building, we’ve got retirees there during the day, while the millennials are likely to be away at their 9-5 jobs,” Ms Buckley said.
“While 95 per cent of the renters have come from Sydney, we haven’t had as many people from the immediate local catchment, as we thought - in reality that makes up only 40 per cent of customers.
We’ve had people coming from blue ribbon locations, such as Vaucluse and CBD, areas we would have never expected people to move from.
Perhaps this is because our security of tenure isn’t something which is necessarily available in the broader market at the moment.”
Mirvac has around 2,200 apartments in its ‘build-to-rent’ pipeline.
Its next project will be LIV Munro, to open near the Queen Victoria Markets in Melbourne in late 2022. The company also has three other ‘build-to-rent’ development projects in its pipeline, including two in Melbourne (which will open over the course of 2024) and one in Brisbane (to open by the end of 2023).
“We haven’t actually downsized”
Craig and Robyn Potts - both in their mid-50s - moved into LIV Indigo at Sydney Olympic Park after selling their four bedroom home at Stanhope Gardens in Sydney’s north-west.
“After owning our home for 15 years, and having a home that was too big for us, it was a good time for us to sell,” Mr Potts said. “We didn’t know what to do with the cash, but were not thinking of buying.”
“We looked at a few places, and came across LIV, it ticked all the boxes. We don’t plan on moving anytime soon - the area is fantastic, the views are incredible and nothing is a problem.”
The Potts moved into a three bedroom apartment, for which they pay $1,000 a week.
Due to the expansive communal facilities, and the large apartment size, the Potts don’t actually feel they have ‘downsized’ compared to the area they used to occupy in their former home.
“I have yet to meet any residents who are standoffish, people invite us for events down on the deck and we know everyone who lives on our floor,” Mr Potts said.
I think there are a lot of people who could buy, including young families and people our age, but choose to rent.
“We could have bought a home again if we wanted, but we didn’t. And now we are in, don’t plan on going anywhere.”
Mr Potts said he has been particularly impressed by the communal facilities, including the co-working, boardroom and kitchen spaces.
“If I want to do some work, I can go to the co-working space, while if I want to have a Zoom meeting I can use the boardroom,” Mr Potts said.
“When my wife wants to do a lot of cooking, she can go to the communal kitchen.”
For Mr Potts, the fact there is no hidden ‘divide’ between owners and renters - and the fact they will not be evicted like other renters by a returning or divesting ‘mum and dad’ landlord - is an important part of the development’s value proposition.
Given the Potts have two dogs, the fact the project is pet-friendly is also a bonus.
Renting a growing option for over 50s
Downsizing.com.au CEO Amanda Graham said renting retirement properties long term was well established and accepted in many other countries, and it was now an emerging and growing downsizing trend in Australia.
“We know more Australians are entering retirement without the benefit of property ownership, with a mortgage they don’t want, or struggling financially after divorce or the death of a spouse” Ms Graham said.
This means many more people are now looking for secure, longer-term rental options in retirement.
"Build to rent developments like Mirvac’s can give them the long term security they want, and which has been missing in the general Australian residential property market until now.
“Many Australians are realising that it could make financial sense to release equity by selling their home and then move into secure long term rental premises."
Ms Graham said there are some huge tax advantages when it comes to renting.
"You don’t need to pay stamp duty, nor body corporate fees or council rates, and if you claim the aged pension it is also possible to benefit from Commonwealth rental assistance,” she said.
“Over 50s may want to look at more upmarket options such as the Mirvac towers, or less expensive and more traditional options such as seniors’ rental villages or rental retirement villages.
“Land lease communities which offer a hybrid owning and renting model are also becoming more popular.
“The most suitable housing options will vary depending on whether you are a self funded retiree or eligible for a government aged pension, and it’s important to seek out legal and financial advice regarding your personal circumstances."
Find out more:
- Innovative new rental options for over 50s
- New rental-only towers launched at Sydney Olympic Park
- New group household rental option launched for seniors