As many retirees weigh up the “cost” of downsizing to free up some extra cash, a significant cost to consider, aside from financial, is the emotional and physical impact moving out can have on older people’s wellbeing.

Research, conducted by National Seniors Australia, showed that 64% are concerned for their long-term future about their ability to afford suitable housing, with 26% extremely concerned about longer term future cost rises. In addition research, conducted by the Royal Melbourne Institute of Technology (RMIT), showed that almost 90% of senior Australians want to remain in their home for as long as they can, and 93% would prefer to remain in home ownership – as opposed to renting, or even downsizing.

These findings are consistent with Heartland Finance’s most recent customer survey results which showed that 82% of respondents believe the most important thing to them in retirement is continuing to own and live in their own home.

The thought of moving into a new home can be exciting for some. However, it’s a big expense and as we age, the complexities of finding a suitable place to live, working through the legal, financial and transactional stresses of selling and buying a new home can be an exhausting and emotional exercise.

In addition to the cost of marketing and selling your home to purchase a new one, there are many costs to consider including; valuation and survey costs, stamp duty, the deposit, real estate and legal (conveyancing) fees, storage and disposal, and the physical moving costs – and in the current economic environment, it’s certainly not cheap to hire help.

According to realestate.com.au the average cost to move home, in the same city is around $130 to $200 per hour, at least. The total cost depends on several factors including the type of house you’re moving into and how far away you’re moving. If you’re moving interstate, for example between Melbourne and Brisbane, moving is estimated to cost between $5,500 to $10,500 in total.

On top of all this there’s the logistical stress of packing your life’s belongings, cleaning up, selling furniture, changing your insurance, redirecting your mail, reconnecting your utilities and service providers, changing your address for all your subscriptions and memberships, saying goodbye to your neighbours, finding a new doctor, dentist, cleaner and joining new community centres and groups if you’re moving suburbs. This can be emotional for many and quite overwhelming.

As mentioned in a recent article in The Guardian, there are many factors to consider when calculating the value of a home to fund retirement. The perceived gains can quickly diminish, impacting future purchasing power. And downsizing could mean buyers need to relocate to remote locations away from family, friends and essential services.

The benefits of ageing in the home you love can far outweigh the benefit of moving out, said Sharon Yardley, General Manager – Reverse Mortgages at Heartland Finance, Australia’s largest active provider of reverse mortgages.

“For many of our customers, ageing in place, or staying put in their retirement years, is more enjoyable and therefore better for their overall wellbeing. And for some, it simply makes more sense to remain in the place where family memories, services and community are.”

There are alternative options for older Australians, who are feeling the pinch

If you’re aged 60 or over, own your home and need to access money, releasing equity from your home with a reverse mortgage might be a sensible option. According to moneysmart.gov.au it’s worth weighing up the pros and cons and considering the alternatives. The equity released from a reverse mortgage can be used for a number of things to help over 60-year-olds live a more comfortable retirement.

To find out more about what a reverse mortgage can be used for, take a look at this article.

Information provided is accurate as of 20 June 2023 and may change from time to time.