What we’re finding is that the baby boomer demographic is really driving the market, and the kind of property they’re after isn’t necessarily a retirement village, so it’s changing the scope of what they’re looking for.
Topic – Downsizing – the opportunity
Mentor – Greg Oddy
Kieran: … downsizing, it’s a pretty hot topic. It feels like we’re getting older and healthier in some ways at the moment, but what does it really mean? And why is it so important to us? Well, we’ve got a real expert here today, Greg Oddy, who is the Sales and Marketing Director for Downsizing.com.au. It’s a site that deals with stakeholders looking to work in this market. Greg.
Kieran: Thanks for joining us.
Greg: Thank you for having me, Kieran.
Kieran: As I was saying, downsizing, quite a hot topic at the moment, but surely, it just means retirement. Is that the case?
Greg: Well, not necessarily. I mean, if my room that I stayed in the last couple of nights is anything to go by, it’s really quite a small room, so there’s probably a lot of scope for it. But what we’re finding is that the baby boomer demographic is really driving the market, and the kind of property they’re after isn’t necessarily a retirement village, so it’s changing the scope of what they’re looking for.
Kieran: Yeah, right. Does that change the way that we’re building and constructing properties for that market now? Are they needing something a bit more relevant?
Greg: Yeah, definitely. Someone who’s looking to downsize, usual a retiree, there’s a few things that they want to do, and one of those things isn’t move again. So there’s a bit of a trend in Australia towards in-home care as well. The thought is, we get a property now that we like, it’s got to be luxury, it’s got to have great appliances, good qualities, things like wider doors, lower power points in case one of the partners ends up in a wheelchair. And what they’re thinking is, “We’ll move there and stay in this location and then we’ll bring in in-home care if we get to a point where we can no longer look after ourselves”.
Kieran: Yeah, right.
Greg: So, that’s really changing the whole landscape.
Kieran: What sort of age group … you’ve mentioned baby boomers, but I’m not a baby boomer and I’m probably reaching at some point where I qualify for pensioner’s insurance. What sort of age groups are we talking about?
Greg: Well, look. I mean, we’ve had clients talk to us that are in their 40s that have downsized. Soon as the kids don’t want the backyard anymore and the kids are late teens or early 20s, they’re not home anymore. So why do we need all this … The majority of people that are downsizing, it’s really … it’s not always about the money, it’s more often about the space and having less things to do around the home, so they can do other things like travel and go out and enjoy their life. Which is a bit different to their parents, a bit less frugal than in past times.
Kieran: I mentioned in the introduction, we seem to be getting healthier.
Greg: Yeah, sure.
Kieran: So there’s going to be downsizers, I assume, which you’ve touched on, that don’t need to worry about maybe the aches and pains and creaks and care that you’re talking about. But do they still want something different in their homes? Are they looking for certain sorts of facilities?
Greg: Something that we find really interesting, just before Christmas, about a month or so ago, we looked at some analysis on our website about what are the most highest search boxes that are ticked, and it’s still things like the pool, so it’s more aspirational. So a lot of people, whether it’s retirement village or going into a brand new strata residential complex, they want these lifestyle luxuries that are more aspirational, whether it’s because they’ll entice the grandkids to come and stay a little bit longer, or just to say we’ve got this lovely pool and we’ve got all these amenities. That’s certainly something that surprised me, seeing a lot of the villages I’ve been to that no one’s in the pool. So.. but higher search time on our site.
Kieran: I imagine, too, given that the cohort is such a large movement, a wave of people coming through, that it’s a fairly lucrative market and it’s sort of market brokers are going to want to get involved in. What are some of the things that brokers need to do to deal best with buyers, sellers and renters in the downsizing market?
Greg: Yeah, yeah. Look, probably some numbers around that first. There’s 8.8 million elderly classified in Australia, and 5.5. million of those are baby boomers. And the baby boomers that are looking to transact in this market, the wave hasn’t even started yet. And the trends are the same in the US and the UK, and we’re looking at those markets as well. But from a real estate agent’s point of view, well, I had a chat with the guy from Hersfield, an agent just last week, and he says, “We didn’t know you existed. I specialise in this. I mainly deal with retirees to sell their home and then I help take them through the transaction of whether it’s a retirement village or whatever their next purchase is, if it’s new apartment or whatever.”
Greg: We’re finding we’ve got clients around the country that are doing this. It might be an office that does it or just a sales person. So one common thread from talking to these kinds of people is they’re very passionate about the elderly people that they’re working with. They really care about those people, and not just the real estate side of the deal and that sets them apart. Sure, they want to make money and they want to get the deal right, but they know that if they do the right thing, these people will give good referrals and they’ll know plenty of other people in the same space. So we’re seeing the selling part and the buying part becoming a really integral part of the agency, that they want to take those vendors right through and help them purchase their next property. And that means they may have relationships with certain retirement villages, or developers for the consumer to be able to make that decision once they’ve sold.
Greg: It’s a big process for someone in that bracket. I mean, it’s a physical, emotional, financial decision, and more so than anyone else selling, because there’s a pension to take into consideration, there’s the new downsizing benefits that government’s brought in, there’s a variety of things. There’s the family, the children that weigh into it quite heavily as well. So there’s a lot for the real estate agent to have to deal with to get through that process, very important.
Kieran: Yeah, yeah. Sounds like you sort of have to be there for every link of that chain.
Greg: Yeah, and be involved with a financial planner as well, in control of that.
Kieran: Yeah, terrific. Also, downsizing doesn’t necessarily mean you’re going into something a little less, does it? I mean, prestige downsizing is a thing. Can you tell me a little bit? Is there a rise in that?
Greg: Yeah, definitely. I spoke to a gentleman last week, before I came away, who was a CEO of a large real estate franchise, and he went from a $3 million property and downsized into a $5 million property. There are stories in Mossman of areas of people downsizing from a $10 million property to a $12 million property.
Kieran: What are they getting? I’m just-
Greg: Well, they’re getting out of a big home into something smaller, and that’s their key objection. They want to do less work around the home, and they’re happy to pay for it. They’ve usually got … the spectrum that we deal with, the high-end, they’re cashed up and they’re prepared to spend the money.
Greg: There’s also, unfortunately, the other side down lower, where we have a lot of demand on our site for rental properties and our traditional advertisers, being villages, don’t have rentals. They’re not looking for listings like a real estate agent is. So that opens up some opportunities on our site for certain agents around the country to be able to hone into that listing side, but also the buying side of the consumer in that bracket.
Kieran: I know that it’s Downsizing.com.au, but this phenomenon is not isolated to Australia. Do you know a little bit about the overseas market and maybe some things that are happening out there?
Greg: In particular, and we’ve got some URLs in other countries, so we’re looking at things. We’re doing a case study in the UK at the moment. And it’s ripe, because in the last five or six years, they’ve been starting to build some really luxury retirement villages, which traditionally in the UK market, particularly London, they didn’t have that facility. A lot of the elderly would stay at … I forget the exact term, but they’d stay in part of the property down the back, kind of like a granny flat situation here in Australia, that was post war, they used to be bunkers that were built then and a lot of the retirees would move into those, but the last few years has seen a real change.
Greg: America, in particular, I mean, some of our biggest clients in Australia are American-based. America’s ripe for it. They’ve even gone as far as having retirement communities that are based on another niche. It might be a golf retirement or whatever else, a cooking retirement … I don’t know. But there’s quite a few different ones, where you go to the same retirement village of whatever your passion or interest is at the next level, so it’s quite interesting as well.
Kieran: Well, it’s not something that’s going away. I mean, maybe we should say downsizing and taxes are the two inevitables from now. Huh, Greg.
Greg: True, yeah. Exactly.
Kieran: Thanks very much, Greg.
Greg: Thank you.
Kieran: Appreciate your time. It’s Greg Oddy from Downsizing.com.au, here at Inman in New York.