When people talk about downsizing, most of us immediately assume we're talking about retirees.

However, there are a number of reasons that people think about downsizing. 

When you downsize, you're selling a larger home that you no longer need, and are buying something smaller than is often more cost-effective, or better suited to a new lifestyle.

Your kids are moving out

The main reason that will be a big factor in your decision to downsize will be your children leaving home. If you own a large 4-5 bedroom house with a large backyard, it might quickly become far more space than you require. 

Larger homes can also require a lot of work to maintain, and many people also like the idea of being able to travel and not have to worry about house maintenance and looking after large gardens and lawns. 

When your kids move out, you no longer need to consider school catchment areas, or living in proximity to good schools. Many parents move to very specific locations that often feature large family homes in these areas to give their children the best education they can. When your kids are no longer in school, it can open up a lot of opportunities to live in different areas. 

Retired

With the huge increase in the value of homes in Australia over the past 40 years, many retirees are sitting on very large assets in their family home. The plan for many of these baby boomers is now to sell their property, buy something smaller and use the proceeds to fund their retirement. 

This is an even more appealing proposition given that you don't have to pay taxes on the capital gains for you PPOR.

Don't need to be in the CBD for work

One of the main reasons for younger people to downsize or move is that they don't need to be in certain locations for work anymore. One of the biggest changes that we've seen from the pandemic is that people are now demanding that they have more flexibility with their jobs and don't want to go into the office if they don't need to.

While the surge in people moving to the outer suburbs has slowed down, many are either choosing not to move back to the inner city or are actively looking for ways to stay out of the 9-5 grind.

Location change

Some down sizers simply want to live on superior locations that offer more amenities and choose to live in smaller homes in more central locations. 

Particularly, if someone has built up some savings or some equity, they can find themselves in a position where they can choose to live in their preferred location and will look to downsize to find something they like.