Baby boomers in great big homes are finding it hard to downsize while younger people with a first home under their belt are finding it hard to upsize.
A vicious cycle is in play in the property market, says Wellington real estate agent Andrew Duncan of the agency Relatable.
Mum and dad baby boomers are sitting in their big properties because they can’t find smaller ones, he says.
When smaller properties do come on the market, the baby boomers find they can’t compete with hordes of eager first home buyers.
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And because their downsizer homes are therefore not coming onto the market, upsizers are frustrated as well because there aren’t homes for them to move their growing families into.
“It’s a dynamic that really slows down the market as a whole - it’s really hard to downsize in a hot market; it’s really challenging people.”
Duncan says the problem is people like his parents, who live in a 300sq m house, don’t want to sell unless they can find the right house to move to.
“But if they make an offer that’s subject to the sale of their own house it’s completely uncompetitive with 10 other offers that are there from first home buyers.
“So, often what you have is the downsizers competing with the first home buyers for your smaller two or three bedroom place, and they (mum and dad buyers) just don’t have a chance.
“What that does is it stops the whole market moving because then you don’t have the big family homes coming on the market which would then free up more of the first home type properties, so you get this kind of vicious circle where the volume in the market really shuts down.”
Duncan’s comments are echoed by that of Auckland agent Jelena Freeman.
The Premium agent says she has clients in $5m and $6m homes they have lived in for 30 or 40 years, and where they raised their families, who are considering their next move.
Their homes might have some deferred maintenance to attend to but are in superb locations, she says.
They owners, who might be in their seventies or eighties, don’t want to live in an apartment or retirement village but want to free up some money to help their children and to buy a smaller property of similar quality in a similar location that perhaps has a lift or is only one level.
Most want a freestanding house - but there just isn’t enough of that kind of quality stock available, Freeman says.
So instead of selling they are “delaying it, delaying it.
“And some of them are too delayed until they’re in crisis; husband’s had a fall, husband’s had a stroke, wife’s got cancer, and then it becomes much more dramatic and much more urgent.”
Freeman says she is talking to developers to ask them to build more of the kind of stock baby boomers need, or to put lifts into properties to future-proof them.
Andrew Duncan also says the answer lies in somehow incentivising builders and developers to build properties that would suit the downsizing market.
“People are really looking for just nicely presented two to three bedrooms, preferably single level, 100sq m, enough for an office and room for one of the kids to come and stay if they want to.
“In Wellington, builders just aren’t building those properties. When you do get a section people are building the biggest house they can on that land to maximize the value.
“We meet a lot of people that, you know, the kids have left home and they want to downsize but they’re just kind of trapped, which is not easy. You know, you’re stuck in a big house with a big lot of rates.”
Duncan says whenever a family-friendly four or five bedroom home comes on the market “it just goes crazy because there’s so many people trying to be upsizers”.
The agents agree that upsizers on the whole want to be in locations with good schools, and downsizers want to be in good locations with good transport and ease of access to services and amenities.
“They’d put up with a crappier kitchen or bad carpet if the house feels nice,” says Duncan.
And Freeman warns that older people can stay in a property too long.
“You need to make a call. If you’re in your late sixties, early seventies you need to make a call right now, while you are in charge of your own future, about where you want to go next and make a move about when.”
There’s a small window at that age that if you miss you might not move at all because it has become emotionally and physically very difficult, she says.
