Downsizers could help unlock Australia's underused housing stock
With almost nine in ten households aged over 55 having at least one spare bedroom, downsizing could free up larger homes for younger buyers — but major barriers remain.
As older Australians begin to downsize and offload long-held properties, they may well hold a key to addressing the housing supply crisis.
With an intergenerational wealth transfer firmly underway, a seismic shift in the housing market is on the verge of unfolding.
Australia’s ageing population now comprises just shy of 30 per cent of people over 55, and that relatively wealthy cohort is sitting on large stockpile of unoccupied rooms.
According to the realestate.com.au GemLife Downsizing Australia Report 2026 released recently, 88 per cent of 55+ households nationally have at least one spare bedroom, and 60 per cent have two or more.
The report illustrates how incentives to attract these outsized households into communities that offer comfort, convenience and freedom from the maintenance of older and larger homes, could transform the utilisation of Australia’s existing housing stock.
While low-level maintenance is appealing to 79 per cent of older downsizers, financial and personal barriers still remain. Three in 10 downsizing respondents are deterred by the hassle of moving, and the burden of stamp duty costs (26 per cent) associated with purchasing a new home remains a major impediment to bringing larger family homes onto the market for younger buyers’ families.
Adrian Puljich, Managing Director and Group CEO of GemLife, said the conversation around downsizing needs to shift to what people gain in the transition.
“People come to the decision at different stages of life, from different places and for different reasons, but they generally have one thing in common – they’re looking for greater freedom to live life on their terms.
“They want lower maintenance living where there’s still space for family and friends, connection, independence, security, and room for the things they enjoy, like travel.
“The land lease sector has become one of Australia’s fastest growing housing models as it's designed specifically to hit those benchmarks, and we need to ensure we continue keeping pace with the significant demand, particularly as our population continues to age.”
Two-bedroom homes are the most popular choice among Australian downsizers, preferred by around half of respondents. More than a third still want three bedrooms.
Conversely, just under half of homes built between 2016 and 2021 were one- to three-bedroom houses or units, highlighting a potential mismatch between the homes being built and what downsizers want.
Wealth transfer stirring
Older Australians hold a substantial share of Australia’s residential property wealth, giving their decisions about whether to sell, hold or pass on a home considerable influence over the housing market.
The Bankwest Curtin Economics Centre estimates households aged 65 and over hold $2.8 trillion in net property wealth, representing just over 30 per cent of the nation’s total housing assets.
As these owners retire, reassess their living arrangements or plan their estates, some are choosing to sell properties they have owned for decades. The proceeds can help fund retirement, support children and grandchildren into the property market or allow families to redistribute wealth across generations.
Angus Raine, Executive Chairman of Raine & Horne Group, on Thursday (22 October) said the number of long-held properties changing hands was becoming increasingly noticeable.
“For many families, properties that have been held for 20, 30 or even 50 years are more than just real estate,” Mr Raine said.
“They represent decades of capital growth and family history.”
Once-in-a-generation buying opportunities
For buyers, the release of these properties could open up opportunities that have been scarce for years, particularly in established suburbs and tightly held regional, coastal and rural markets.
Mr Raine said he was seeing an unusual number of homes advertised for sale for the first time in several decades.
“In my 35 years in real estate, I can’t recall seeing so many property advertisements highlighting that a property is being offered for sale for the first time in 30, 40, 50 or even 80 years,” he said.
Some of these properties offer established locations, larger blocks or characteristics that are increasingly difficult to replicate in newer housing developments. Their appeal may extend beyond the home itself to the land, neighbourhood and lifestyle that come with it.
Buyers, however, should not assume that a long ownership history automatically makes a property good value. Condition, maintenance requirements, location and price still need to stand up to scrutiny.
For sellers, the decision can be equally significant. Leaving a home occupied for decades is not simply a financial transaction, but can mean parting with a familiar community and the place where family life has unfolded.
Mr Raine said selling could also give owners an opportunity to reconsider how their wealth was being used, from funding retirement and supporting relatives to investing elsewhere.
With older Australians holding such a substantial share of the nation’s housing wealth, the choices they make over coming years could influence which properties become available, who can buy them and how wealth passes between generations.
