The well-publicised price growth in the Victorian property market has created opportunities for a variety of homeowners to reap substantial financial benefits in 2022. However, as is so often the case, some people have the potential to reap more benefits that others. Right now, anyone who is planning to sell the ‘family nest’ and downsizing looks to be in a better position than most.
One of the reasons for this is the robust growth in property values. Recent figures from Domain showed that Melbourne’s median house price has increased by 35 percent over the past three years, rising from just over $815,000 in the March quarter of 2019 to its current record of just over $1.1 million.
This means that, on average, the gap between what you sell your existing property for, and the amount you pay for the smaller residence that better suits your new lifestyle, has also increased by 35 percent. For the average Victorian homeowner, this could put an extra $150,000 to $200,000 in your pocket after changing homes…or even more for some.
With many market watchers forecasting a levelling out of prices in the foreseeable future, the next few months could well prove to be the ideal time to sell for downsizers.
The other factor that should not be overlooked is that back in 2018, the Federal Government introduced a program to give downsizers an added incentive to sell, allowing some sellers to make a non-concessional contribution of up to $300,000 from the proceeds of the sale of their home into their superannuation.
The criteria to qualify for this scheme included that you need to:
- Have owned your home for a minimum of 10 years;
- It must be your principal residence, (not a holiday home for example); and
- You need to be 65 years of age or older.
For those who do not quite meet the age requirements yet, the Government announced last year that it is planning to lower the minimum age to 6o years from July 2022, but you should seek qualified advice to be sure of the current requirements.
Of course, contemplating making the move to a smaller home when downsizing is not something you should take lightly, particularly when the whole real estate market has probably changed markedly since you last sold a home.
Therefore, we would recommend that you have a chat with one of our experienced Vendor Advocates before you make any firm plans, as our team have been assisting Victorian downsizers for many years. Importantly, it won’t cost you any extra to have that level of protection.
If you’d like to discuss how much easier the process of downsizing can be, you can give the team at Ian Reid Buyer and Vendor Advocates a call on 9430 0000. You’ll also find lots of helpful suggestions for property sellers in our free booklet, “Fatal Real Estate Traps Exposed”.