If the Sydney market is supposed to have cooled, one market segment hasn’t received the news just yet.
Prestige downsizers are still willing to make strong offers on any property that meets their discerning standards.
We explore who these buyers are, what exactly they’re looking for and why comparatively few properties meet their requirements.
Who are the prestige downsizers?
Prestige downsizers are usually mature buyers who have recently sold the family home and now want a change of lifestyle.
One factor that separates the prestige downsizer from downsizers more generally is the size of their budget. They’ve often just offloaded a four or five bedroom on the Eastern Suburbs or North Shore, where prices for a large home tend to range from around $2 million to more than $5 million plus.
Given they have often had little or no mortgage over their home at the time of sale, they also have a lot of money to spend on their next home – in cash.
What the prestige downsizer is looking for
Unlike some popular images of mature buyers, prestige downsizers aren’t always looking to move to free up cash for their retirement. A study by the Australian Housing and Urban Research Institute (AHURI) found many downsizers are actually moving to enhance their lifestyle.
In fact, many prestige downsizers are still working and have no intention of retiring any time soon.
But they do want to be closer to the action and expect good transport links and amenities such as restaurants and cafes. They also want a home that requires less maintenance than their previous residence.
They’re also looking for something much larger than you might think.
The AHRI report many so-called downsizers actually bought dwellings of similar or larger floor area than their previous dwelling.
Demand outstrips supply in the prestige apartment market
The main problem for prestige downsizers is that there simply isn’t enough stock with these characteristics to meet the demand. This alone keeps prices high and competition strong.
After all, the obvious choice is apartment living. But there’s little on the market to suit their needs.
We’re not talking here about standard three bedroom apartments. Prestige downsizers demand supersized flats with house-like proportions. A generous terrace or balcony is popular as is level access – via a lift or walkway.
Older apartment blocks usually can’t meet these expectations without extensive renovation. So many prestige downsizers need an even bigger budget and the vision and determination to undertake a renovation if they’re to purchase an established home.
While some new developments are springing up to fill the gap – especially in places like Rose Bay and Darling Point – these still command a premium simply because so many buyers want what they offer.
Strong demand for apartment-style houses
It sounds like a contradiction in terms, but another alternative – and a style of property very much in demand with downsizers – is the apartment-style house.
We receive a huge amount of interest from prestige downsizers in any kind of small house that also offers the benefits of apartment-style living such as open plan design, level access and low maintenance.
An example of this is 20B Tivoli Avenue Rose Bay. While it’s a generous property, it’s future proof with lift access to every level and stunning harbour views.
For those prestige buyers who don’t mind stairs, Paddington terraces have also become exceptionally popular. Many of these have been renovated to provide luxurious but low maintenance living, with every feature of a family home – including multiple bedrooms – on a more compact block. 84 Paddington Street is a great example of this.
What does this mean for the property market?
With a growing population of aging baby boomers looking to downsize, developers should take note of their needs.
They want generous living areas, quality construction and renovations, the best of house and apartment living, multiple bedrooms, and private outdoor spaces.
There simply isn’t enough stock to go around, which keeps prices high, and presents a great opportunity for the savvy developer.
Want to know more?
If you’d like to know more about the prestige downsizer market get in touch.
Sydney’s Eastern Suburbs Market Snapshot
A detailed annual assessment of the property market focusing on the Eastern Suburbs of Sydney, Australia.