We continue our series on the results from our latest household surveys. Today we look at those seeking to trade up, and trade down. These are important segments, as they are both shaping the market.
Looking at up-traders first, these are households looking to sell to buy a larger property. Over one million households fall into this category. There are a number of reasons why households might do this, more space is the single most significant, then comes consideration of the investment potential of their property. Other reasons include life-style changes or job changes. From a trend perspective, the investment aspects of property have become slightly more important.
Turning to down-traders, there are about 1.2m households looking to sell with the prospect of buying a smaller property, and/or an investment property. Increased convenience is the most significant reason to move, followed by the wish to release capital for retirement, and next, a switch to an investment property. Other reasons to trade down include illness, death of spouse, and unemployment. From a trend perspective, the demand to release capital for retirement is stronger, whilst unemployment is less significant now. Down traders are less bullish on future property price growth than other sectors. Only 30% of down traders think prices will rise in the next 12 months, whereas across the market 60%+ of households think prices will rise further in coming months.
We can look in more detail at households over 60 years. The largest group resides in New South Wales, then Victoria.
Within this group, we find a considerable number of down traders, most of whom are looking to down shift into a smaller place for owner occupation, although some prefer investment properties.
We can look at where and what they want to buy. We find that the most significant demand from down traders over 60 years is for property closer to the city, and that more than half of these households prefer a unit. About 6% would consider property in a retirement village setting.
We find that certain factors will strongly influence over 60 down-traders considering a retirement village. Here are some of the most important. Price is the most significant factor, followed by access and facilities.
Next time we will look at investors.
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