Interest rate hikes and the rising cost of living have many homeowners seriously considering downsizing.
But downscaling is not necessarily a step down in terms of home or life quality; in fact, it could be an upgrade.
For long-term owners and those who find themselves with an empty nest or too much space for their present needs, Andrea Tucker, director of MortgageMe says now may be the opportune moment to scale back.
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Those downsizing for a financial quick-fix though, should carefully consider the costs involved as smaller does not always mean cheaper.
“In theory, downsizing should be kinder on your pocket thanks to lower maintenance costs and as well as rates, taxes, and electricity savings. In the short term at least, a move to another home comes with sizeable expenses, so it pays to do the sums before making a final decision.”
Some of the positives of going smaller, she says, include:
- Fewer maintenance costs
- Cheaper utility bills
- More affordable home insurance
- Smaller bond repayments
- A potential cash windfall: Assuming you’ve lived in your current home for some time and your property has increased in value, by purchasing a smaller home you’ll have equity leftover that you can spend or invest as you see fit
- Fewer interest payments: Buying a cheaper property using the proceeds of the sale of your larger home means significant interest savings over time
There are, however, a few negatives to downscaling too, and Tucker says these include:
- Less space
- The possibility of more rules if you move from a freestanding home to a sectional title property
- Fitting in all your furniture
“If you’re lucky enough to own a property that has appreciated in value, downsizing means you’ll be able to enjoy the many benefits of the equity freed up from the sale of your home.
“If you’re choosing to downsize to get out of a sticky financial situation, there may be more beneficial lifestyle choices to make before taking on the many costs associated with selling and moving,” she says.
It is no secret that many homeowners are battling to meet their home loan repayments each month, and if you are able to sell your current home and downscale to one that will cost you less, it will not take away your homeowner status.
Downsizing is a move that should not only be viewed in terms of affordability, but appreciated for the convenience and benefits a smaller property will offer. There is also the added advantage of downscaling sellers being able to buy in the same market, says Stephen Cohen, Dogon agent on the Atlantic Seaboard.
Downsizing is not failure
Downscaling has become a global trend and homeowners going this route should not see themselves as failures, he adds.
Today, there are so many choices in finding a suitable, smaller home, townhouse, simplex, or an apartment, and depending on your age, there are also very modern and trendy retirement villages that are designed for community living and have become extremely popular.
“Disposing of furniture and household items can also be of great benefit to family members, or charitable institutions.”
Don’t assume you have to live in an apartment or complex
Downscaling does not mean you are forced to abandon the free-standing home lifestyle you are accustomed to either. Cohen says there are many options available today, where architects are specifically designing and catering to the public who want the luxury and the privacy of small manageable homes.
“There are cottages and freestanding simplex units – freehold and not sectional title – that offer an easy lock-up and go lifestyle.”
Many also allow pets. However, he says it is important to ask the agent for a copy of the sectional title rules, to ensure that pets are actually allowed. Sometimes the wrong information is given and this could be a traumatic situation.
“Very often, one can get written permission from the chairman or the managing agent allowing you to keep a small pet.”
Be smart about designing your smaller home
If you are clever about your décor and interior design, you may even be able to live in a smaller home without it appearing such. In a media release, Plascon says there are tricks of the design trade that can make smaller rooms bigger.
“Colour is a key part of making your room look bigger than it actually is. Along with special furniture arranging, creative lighting, and the use of mirrors, the smart usage of colour can do wonders.”
So, how do you make a room look bigger with colour? The most straightforward way to expand the visual space of your room is to paint it in a lighter colour.
“While dark shades tend to absorb light and make the room feel closed in, a light wall enhances natural light and makes spaces feel more open.”
Plascon states that soft tones like off-whites, beiges, light blues and light greens fit the description and are softer and more welcoming than harsher pure whites and bright colours. Lighter and more neutral colours are also easy to work with when it comes to furniture and decor.
“Interestingly enough, despite the rule that painting a room in dark colours makes it look smaller, painting one accent wall in a dark colour can actually be very effective in creating depth and making the room look bigger. Darker accent walls also add to the decorative appeal of a room without being overpowering.”
The company’s last helpful trick for making your rooms look bigger than they are is to paint your walls, ceilings, and skirting board all in one light colour to make the room look seamlessly big.
“If you want to take it a step further you can even paint your ceilings and trims in a lighter colour. Colour has the incredible ability to transform any room without having to change space or furniture. Even if you don’t have that much space it doesn’t mean you can’t create the illusion that you do.”
To find a smaller home to suit your needs, visit IOL Property.
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