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Downsizing has dominated real estate in 2025, with older Australians encouraged to sell their homes to free up housing stock, as five Melbourne suburbs poised for downsizer development have been revealed.
The top five Melbourne suburbs set for downsizer-focused development and investment have been revealed, as senior Australians have been increasingly encouraged to sell their homes to free up supply.
A report earlier this year found older Australians tended to have two or more spare bedrooms, signalling an opportunity to free up a significant amount of housing stock if they considered downsizing.
The realestate.com.au GemLife Downsizing Australia Report revealed 85 per cent of Australians aged 55 and older lived in homes with two or more spare bedrooms.
By comparison, a quarter of Australians aged 25–54 had no spare rooms, and 5 per cent had fewer rooms than their family size required.
Jadig Finance and Simple Property Loans managing director, Adam Gringlas, said that five key suburbs in Melbourne have characteristics that appeal to downsizers.
He said that Templestowe, Ivanhoe, Elwood, Armadale, and Williamstown were development hotspots for downsizer accommodation over the next decade.
Gringlas’ analysis examined features such as community amenities, shopping strips along main roads, access to walking tracks, recreational facilities, and proximity to healthcare services.
As part of his comparison, he also factored in the median house price and median age, finding that the areas contained a sense of established wealth and a solid sense of community.
According to Gringlas, the findings revealed downsizers with deep roots in their communities often opted to transition into nearby homes that were low-maintenance and secure.
Gringlas said Templestowe had a clear shortage of high-quality apartments, with much of the area’s wealth tied up in large, high-maintenance homes, creating strong demand for premium, open-plan apartment developments tailored to downsizers seeking an elevated next chapter.
With Australian Bureau of Statistics (ABS) data showing a median age of 46, Gringlas said Templestowe was well-poised for downsizer growth as many residents will be seeking similar high-end apartment options.
“Buyers in this segment want to maintain their lifestyle while moving into something easier to manage, without leaving the community that they know and love,” he said.
Elwood and Armadale have also been identified as prime spots for downsizer development due to their convenience and recreational offerings, with features such as well-appointed shopping strips and proximity to hospitals and specialist healthcare centres.
Gringlas said that in those markets, one in six people were aged over 65, presenting an opportunity for developers and investors to expand the residential offerings and respond to the needs of Victoria’s ageing population.
He added that he had noticed retirees often tended to value communities familiar to them, with buyers for developments rarely coming from locations more than two or three kilometres away.
“It’s rare to see someone from Templestowe downsizing in Elwood, for example,” he said.
“Developers and investors should be seeking to broaden the low-maintenance and single-floor residential offerings across the state and take the time to consider the factors that are encouraging downsizers to stay in the suburb they have lived in for some time,” he concluded.
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