Homeowners are looking to upgrade into larger family-friendly homes, however empty nesters are refusing to budge.
According to BIS Shrapnel’s Emerging Trends in Residential Market Demand Report, 20 to 34 year-olds are looking to move into their next stage in life, with many placing larger family homes in their sights.
Raine & Horne CEO Angus Raine believes that retirees are in the best position since 2007 to make the move to smaller properties.
“Younger buyers are looking to take the next step up the property ladder, yet there is a shortage of suitable homes to meet this demand,” he said.
However, the BIS Shrapnel report also reveals no evidence of increased downsizing among retirees aged 65 and above, which could impede younger generations from securing a larger family residence.
“I would encourage any empty nesters considering a property move to get their skates on or be swamped by a wave of retirees looking to downsize into smaller homes,” says Mr Raine.
In an attempt to create some movement in the market, the federal government announced a trial scheme for aged pensioners looking to downsize their home in the Budget last week.
The scheme will begin operation in July 2014 and will allow pensioners that have owned their home for more than 25 years the opportunity to invest a surplus fund of up to $200,000 into an account.
This fund will then earn interest and will be exempt from the age pension for up to 10 years.
Pensioners who downsize their homes can put the proceeds of the sale into this fund and it will not count against their pension in relation to the asset and income test.