Is downsizing the key to financial freedom and better living?

Is downsizing the key to financial freedom and better living?

Some homebuyers and owners still associate the idea of downsizing with a loss of status, especially if they own a large family residence and aren't yet at retirement age, but this perception is steadily changing as more people realise that they can actually enrich their lifestyle by moving to a smaller property.

We see the tiny home movement gaining ground all over the world now, especially among young, first-time buyers who are struggling with affordability and also really want to live sustainably.  This trend is supporting the demand for the micro-apartments currently on offer in many new developments.

But we are also noticing a growing trend now among older, repeat buyers towards downsizing from large suburban homes to more compact properties that they believe will offer them and their families a better overall quality of life.

New cluster homes and townhouses in the boutique security complexes that are now being developed in many older suburbs are especially popular, because they offer families greater security without the inconvenience of having to change schools, adjust to a new area or find new routes to work.

The overall trend has also been driven, since 2022, by higher interest rates as well as the rising costs of ownership, including property rates, insurance and maintenance. In fact, figures from the FNB Property Barometer show that while almost 22% of property sales currently are due to owners seeking to relieve financial pressure, the majority of those sellers are choosing to remain homeowners by buying a less expensive property, rather than renting and becoming tenants.

Add to this another 22% of sellers who are downsizing to smaller homes due to life stage, and it's clear that many repeat buyers want greater financial freedom while continuing to enjoy the benefits of homeownership.

They have realised that in addition to lower bond repayments, smaller and newer homes generally come with significantly reduced monthly expenses and maintenance requirements. And this financial relief often translates into greater opportunities for families to improve their lifestyles by sending children to better schools or to university, for example, or by taking up new hobbies or sports, travelling more or even investing in a new business.

Those who downsize can also expect to pay less for essential services such as water and electricity, while living more sustainably because smaller homes require fewer resources to build and run. Fewer rooms and smaller spaces also mean less time required for cleaning and household chores, and more time for family activities you enjoy or simply relaxing with friends.

So, while the idea of moving to a smaller home may initially seem like a step back in terms of status or success, it can actually be a big step forward in terms of life satisfaction. Making the choice to downsize often means less stress, more free time, and the opportunity to focus on what truly matters.

There are some potential drawbacks. You might have less space to accommodate out-of-town guests or to host large gatherings. Initially, you might also feel a bit cramped or miss having separate rooms to retreat to for some quiet time.

However, these challenges can often be mitigated with thoughtful space planning and design, and many people find that the trade-off is worth it when they consider the benefits of a simpler, more organised living environment and freedom from the time-consuming demands of a large home.

Another great benefit of downscaling is that small spaces require less furniture - a few great statement pieces allow for simple, minimalist décor and a beautiful, welcoming home at a fraction of the cost of furnishing a big house. And the cleaning is a breeze!

Less clutter equals less stress, and isn't that what we are all looking for now?

Tips for cosy-home hunting:

Location, location, location - You want to remain close to your family and friends, and have ease of access to stores and other amenities such as doctors, hospitals etc. Narrow your search to areas that tick these boxes.

What are your deal breakers? Does the home offer the main assets that are important to you, for example, a good kitchen, nice family space, shower etc?

Current wants vs future needs - If you are downsizing because the children have moved out and you are getting older, consider a single story with the ease of access rather than a property with stairs that may cause a problem later.

Growing pains - Will you be able to handle the upkeep of a big garden, or is it time for something smaller that is more manageable? Will your pets cope with a smaller space; is there somewhere nearby where you could walk them?

Fit for purpose - Will your favourite furniture fit in the new space? Make a list of every piece with which you can't part. Take measurements. Then take a tape measure with you when you start narrowing down your list of potential new homes.

Storage war - Is there enough cupboard space in the bedrooms and the kitchen? Do you need outside storage too?

Paper trails - Remember to ask for compliance certificates, even those that aren't required in your province (for example, gas installations and solar geysers should come with a compliance certificate - if something goes wrong and you don't have one, your insurers may refuse to replace the geyser, or cover damage caused by a gas issue).

Complex questions - If you are moving into a complex or an apartment, be aware that there may be the added expense of levies, clubhouse fees and/or security. Ask about historical escalation rates and request a copy of the body corporate rules (if applicable.)

Ask your neighbours if there are any noise issues, does sound travel through the walls and ceiling? How old is the plumbing, the lifts etc - upgrading such items is very expensive and you'll have to contribute. What parking is available for guests?

Extract from Property 24