Looking to save money on your mortgage?
The first question you’ve got to ask yourself, experts say, is: “Do I really need a place this big?”
New data from Muval shows, with interest rates rising, living costs up and lifestyle priorities shifting, more and more South Australian families are downsizing – and saving significant money in the process.
Muvall CEO and co-founder James Morrell said it wasn’t just about getting people into smaller homes, but making smarter financial decisions in an increasingly expensive housing market.
Looking at the SA data, the biggest savings to be made can be found in the Walkerville council area, with downsizers moving from a four-bedroom home to a three-bedder unlocking $508,000 in equity, those downsizing from a three-bedder to a two-bedder $568,000 and those going from a two-bedroom home to a single-bedder $213,000, making an average saving of $430,000.
The city of Burnside had the second highest average saving at $339,000, with the biggest saving going to those who move from a three-bedroom home to a two bedroom home, where the difference is $546,000.
South Australians could save big by downsizing. Picture: Brenton Edwards
Unley council residents save the most when going from a three-bedder to a two-bedder – a $562,000 difference – and an overall average saving of $324,000 while in the Adelaide city council you save an average of $296,000 by downsizing.
The biggest difference here was for those who went from a two-bedroom property to a single-bedroom home.
Mr Morrell said the biggest barrier for people not downsizing was the emotional and practical challenge of letting go of belongings.
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“A lot of people feel overwhelmed by the sheer amount of sorting involved, especially when items carry sentimental value or have been accumulated over many years,” he said.
“That decision fatigue, figuring out what to keep, sell, donate or store, often makes the whole process feel daunting, which can lead people to put it off.”
He said, compared to other Australian cities, South Australia has a stronger “stay-put” mindset.
“South Australia has some of the highest rates of empty nesters still living in larger family homes, with only a relatively small share of eligible homeowners having actually made the move to downsize,” he said.
“Many homeowners remain in desirable, well-established suburbs and don’t feel a strong push to move, while factors such as stamp duty costs, a limited supply of suitable smaller homes, and a desire to maintain lifestyle continuity all contribute to making downsizing less appealing.
Muvall CEO and co-founder James Morrell. Supplied
“It’s also worth noting that South Australia has the second-highest proportion of people aged 65+ in the country, behind Tasmania, which adds an important layer to this dynamic.
“For this age group in particular, there can be significant psychological friction around moving.”
Mr Morrell said what stood out from the data was how limited downsizing activity is in South Australia relative to the number of people actually in a position to downsize.
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“Even though SA has a large proportion of established homeowners and “empty nester” households, only a small share are actively moving from larger family homes into smaller dwellings,” he said.
“This suggests the issue isn’t just ability, but reluctance – people are staying put even when their housing needs have changed.”
When looking at apartment residents, Adelaide city council residents downsizing from a three-bedroom property to a two-bedder can save $320,000.
In the Burnside council area it’s $182,000, while in the Adelaide Hills council, residents downsizing from a two-bedroom home to a single-bedder can save $184,000.
Retirement Living Council executive director Daniel Gannon
Retirement Living Council executive director Daniel Gannon said incentives were needed to encourage older Australians to “rightsize” in order to ease pressure across housing, health and aged care, in turn freeing up housing stock for those looking to either enter the market or upsize.
As well as abolishing the outdated $258,000 retirement village purchase price threshold that locks 96 per cent of homes out of the government’s Commonwealth Rent Assistance program – a rule he describes as a relic of the housing market – he wants to see the age pension assets test threshold for single homeowners who ‘rightsize’ lifted to $550,000, with a proportional increase for couples.
“This adjustment would encourage older Australians to move into safer, more suitable housing without being penalised for making sensible financial decisions,” he said.
“Together, these changes could unlock 60,000 homes nationwide, help older Australians escape housing stress, and free up homes for desperate young families.”
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