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Rightsizing: the downsizing trend toward luxury apartment living

Demand for rightsizing – the downsizing lifestyle trend towards luxury apartment living – is strong in Australia, according to the latest research from Knight Frank.

The Knight Frank Rightsizing – Australian Prime Residential Insight 2020 report found buyers are looking for low-maintenance properties, but with house-like proportions and great amenities.

In essence, they are looking for luxury apartments with at least three bedrooms and two secured car spaces in medium and high-density projects in prime suburbs in Australian cities.

While ‘Active Retirees’ are one of the main rightsizing buyer categories for prime apartments, the other two main buyer categories are ‘Entrepreneurs’ and ‘Families’, according to the Knight Frank research.

Knight Frank’s Head of Residential Research, Australia Michelle Ciesielski said contrary to popular belief, rightsizing wasn’t just a Baby Boomer trend

“Perhaps surprisingly, rightsizing also appeals to the younger generations, and we are seeing this at a much earlier stage than in previous years given the agile, transient and global nature of their work and play,” Ms Ciesielski said.

“For active retirees, many buyers tell us their house is no longer required to provide the lifestyle they want. Often the cost to upkeep the home, pool and garden outweighs the surplus space they once desired.

“Downsizing the living areas is not part of this movement – the yard most certainly – but the new luxury apartment must be the right size, with amenities to match.

“Rightsizers want to be in a walkable location with proximity to activity hubs and amenities.

“From the apartment itself they desire high security and concierge for lock-up-and-leave, a reputable developer and builder with certainty of delivery, single-level, in-house amenities, a good view and aspect, access to transport links, a sense of community within the complex, smart living technology and a new modern building.”

The cost of the quarterly owner’s corporation levy and contribution to the growing sinking fund is often cited as a hurdle to rightsizing, but the Knight Frank research found average quarterly costs for a three-bedroom prime apartment (ranging from $3000 to $8000) were cheaper than the upkeep for a three-bedroom house in a prime suburb ($9000 to $15,000).

Ms Ciesielski said luxury apartment trends to watch over the next three years include the growing ‘active retired’ group, the improved global connectivity with direct flights to Australia increasing competition from international buyers seeking second homes and the undersupply of product.

The Knight Frank research also found the share of three-bedroom luxury apartments being built over the next three years falls for Sydney medium-density projects (to 44 per cent), Sydney high-density projects (to 14 per cent) and Melbourne high-density (to 21 per cent).

The largest share of three-bedroom apartments to be built in prime suburbs is in Brisbane medium-density projects (87 per cent) whilst the largest growth in the share of three-bedrooms being built is in Perth medium-density projects (from 27 per cent to 50 per cent).

In the past three years, the Gold Coast saw the highest portion of three-bedrooms built, at 70 per cent in medium-density projects, this is expected to rise to 81 per cent built by 2022.

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