As experienced real estate agents, we have long appreciated the critical role upsizers and downsizers play in the property market. We have seen how they help drive the flow of new listings, as they move along the property ladder. We have also recognised them as a key market segment and a clear target for many sales campaigns.
This appreciation has only grown over recent years, as upsizers and downsizers have become even more influential. Here we explore what’s behind this increase in activity and how it’s affecting the broader property market. We also share the story of a recent sale that highlighted just how important upsizers and downsizers have become.
Why are upsizers so active right now?
As the name suggests, upsizers are buyers that are looking to trade up to a larger or better property. This could be because their family is growing or living arrangements have changed, and they now need more space. Or it could be that they are finally in a position to buy their dream property in their dream location.
Traditionally, most upsizers were also looking to improve their quality of life, so focused their search outside the inner city. However, more recently, we have seen a growing number of upsizers wanting to remain close to the hustle and bustle. This has led to an increased demand for homes that offer both generous proportions and a city fringe location.
Right now, upsizers are also being encouraged by favourable market conditions. As property prices have adjusted, and readjusted, over recent years, the gap between different market segments has narrowed significantly. This is particularly true here in Sydney, where recent upswings were most clearly seen in the middle of the market. And, when the growth trend began to turn, it was the top of the market that fell the quickest.
What’s driving downsizers to make a move?
Where upsizers are actively seeking more, downsizers are buyers that are actually looking to reduce the footprint of their home. Traditionally, most downsizers were empty nesters who didn’t need as much space as all of their kids had moved out. However, over the last few years, there has been a significant increase in buyers downsizing for financial or environmental reasons.
Importantly, while downsizers want to cut back on space, that does not mean they want to cut back on quality. In fact, luxury inclusions and high-end finishes sit at the top of the wish list for many downsizers. As a result, they tend to be the key target buyer type for boutique apartments and designer townhouses.
Downsizers are now also a key target for many other property types, particularly in inner city areas. This is because most downsizers plan to sell their previous, larger home, and this will generally release significant equity. As a result, they will often have a large amount of cash to put toward their next property.
Moreover, many downsizers are concerned about their financial future and want their next home to be mortgage-free. As such, they are true cash buyers and can move quickly when they find somewhere they love. They are usually also less risky, as they won’t be impacted by interest rate rises or tightening lending conditions.
A real world example
We recently sold 178 Hargrave St, Paddington – a charming Victorian terrace perfectly positioned between Woollahra Village and Paddington.
Given its location and generous proportions, we knew this property would appeal to upsizers wanting to stay near the city. Across its 3 storeys, it had 3 large bedrooms, including a substantial master suite, and 2.5 bathrooms. It also had an impressive north-facing rear courtyard, complete with decking, secure off-street parking, and rear lane access.
We also felt that, as it had recently been completely updated, it would also attract attention from local downsizers. It offered the unique mix of period character, modern conveniences, and designer touches many downsizers were after. It also represented a comfortable next step for those scaling down from a larger freestanding home in the surrounding area.
In the end, the property did attract significant interest, with over 90 parties attending across 5 scheduled inspection times. And, as expected, upsizers and downsizers accounted for the majority (approximately 80%) of interest we received. However, it was ultimately sold for $3.57m to a first home buyer whose parents helped them make the purchase.
What’s more, the buyer only found out about the property by complete coincidence. They had been driving through the area and their satnav had stopped working, so they pulled over nearby. At the same time, we were about to start an inspection, so put our sign out, accidentally blocking them in. As they were thinking about buying, they decided they might as well come in, and the rest was history…
The lesson here? While it’s important to market to a specific buyer type, properties should ideally have a broad appeal. And, while digital marketing is a critical component of a good sales campaign, the traditional tactics still have their merits.
Want to discuss this further?
If you’re thinking of selling and would like more information on appealing to upsizers and downsizers, call Local Agency Co. We’re experts in targeting different buyer types and can help you understand their unique motivations and priorities. Our experienced team can also work with you to develop a detailed sales strategy, tailored to your property and goals.