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Aussie homeowners are selling up in droves

Reviewed by expert, Andrew Winter
4 min read
29 Jan 2024
Couple moving into new home

There may be a squeeze on the property market right now, but new Compare the Market research shows that almost 40% of Aussie homeowners are planning to sell their property within the next five years. Interestingly, around 30% of Aussie homeowners intending to sell are planning to downsize.

According to the latest findings, 6.2% will sell within the next 12 months, 12.4% will sell within the next two years, and a further 20.7% said they will sell within the next five years. However, almost two-thirds of Australians are staying put, with no plans to sell.

It’s been a grim 18 months for Australian borrowers, between 13 cash rate increases and the rising cost of living. Compare the Market’s property expert Andrew Winter said many have been forced to exit the property market.

“While our research shows that many homeowners are planning to sell in the near future to upsize, downsize and move to a different area, the harsh reality is many are selling up shop because they have no other choice,” Mr Winter said.

“Unfortunately, a number of landlords are exiting the property market because of an increase in property taxes, fees and stricter tenancy legislation. They simply can’t afford to pay for a second mortgage.

“Plus you have to pay body corporate fees for facilities you don’t even use.

“You also generally pay a higher interest rate on investment loans than you do owner occupied – so when push comes to shove, people are obviously going to choose to keep the property they live in, which is costing them less.”

According to Compare the Market’s data, the top reasons why people are planning to sell include upsizing (31.4%), downsizing (30.1%), moving to a different suburb (25.1%), and financial pressures (19.5%).

Why are you selling your property?Total
Upsizing31.40%
Downsizing30.10%
Moving to a different suburb25.10%
Financial pressures19.50%
Cashing in on investment property8.10%
Moving to a different state7.80%
Divorce4.80%
Struggling to pay second mortgage on investment property3.80%
Moving overseas3.00%
Other (please specify)2.80%
Poor rental returns2.30%
Too much red tape for investors1.00%

Survey of 1,005 Australian homeowners, conducted in September 2023.

Mr Winter said downsizing could be a partial solution to the rental crisis in Australia.

“When empty nesters finally decide to downsize from their house to a small unit – this allows other investors to snap up that property and rent it out to people in need”, Mr Winter said.

Just under 9% of survey respondents said they are selling their investment property to cash in on the money, 3.8% can no longer afford to pay a second mortgage on the investment, and 1% said there’s just too much red tape for investors.

“The data is really quite concerning because investors are a big part of building homes and the long-term solution to the rental crisis,” Mr Winter explained.

“We need investors in the Australian housing market to help facilitate new supply to come in.

“There needs to be rental reform that benefits the tenants without punishing the landlords.”

According to CoreLogic’s Pain and Gain report, just under 10% of properties that were sold in the June quarter that were held for less than two years were sold for less than the purchase price – at a median loss of $30,000.

“People who borrowed close to their maximum amount during the pandemic are possibly the ones being forced to sell,” Mr Winter said.

“But how long should you hold on to a property before you sell?

“If you can hold onto your property for at least five years, you should be able to see some capital growth – depending on the dwelling type and area.

“Before you decide to sell, it’s important to consider the purchase cost, selling costs, capital gains tax, personal time, and holding costs of the asset.

“Selling costs are more than just advertising. Are the tenants going to be there when you sell?

“If not, then you won’t have that rental income you’re used to. If they are, then it could take longer to sell – so it’s a catch-22”.

Mr Winter said homeowners looking to understand how this is impacting them can get a free property report on Compare the Market’s website.

For more information, please contact:  

Natasha Innes | 0416 705 514 | [email protected]

Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.

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