Upsize or Downsize a Property? Conditions for Either

Melbourne is a busy city filled with breathtaking landscapes, good restaurants, tempting coffee aroma, mesmerizing art, and thrilling sports activities. No wonder it’s a favorite tourist hub.

If you are looking for a place to live in Melbourne, there are many houses for sale in the western suburbs and other parts of the city. A suburb is a good choice to have your home, raise a family, or to simply enjoy some peace and quiet in your retirement.

If you have just started living or have been living in Melbourne for a while now, perhaps you’ve been thinking of expanding or scaling down your space. The decision is totally up to you, but in case you’re still undecided, consider these factors to help you come up with a decision:

Changes in Lifestyle

A major shift in your lifestyle requires a lot of adjustments and sometimes, your house could be involved. The most common lifestyle upgrade is a growing family, whether in number or in age. Adding more children would require more room in the house, and as these kids grow, they may demand even more space. Upsizing is a no-brainer for this case. Even if your children eventually move out for college, they are still likely to come home to spend the holidays, so the huge space is still necessary.

Another significant change in your lifestyle is your retirement. If all the kids have moved out for good, you may want to downsize. However, it all comes down to preference. Some people enjoy the luxury of huge living spaces, while others feel more comfortable in less spacious areas. But upsizing and downsizing come at a cost.

2. Budget

Moving into a smaller house means less expensive living costs, such as utilities and maintenance, making allowances for bigger savings. However, buying a smaller property isn’t automatically cost-efficient than buying bigger ones. If your plan is to move out of your big house and move to a smaller one, selling your current house is the fastest way to earn the extra income. The risk of your house not selling fast enough exists, though.

Hiring an agent will cost you more money, as well as advertisements if you plan to put up one. Finding a serious and committed buyer may be challenging, considering the prices of big houses in such a developed city. Your house may linger on the market for long, delaying your downsizing plans.

You may need bridging loans if you have a target time for moving out, regardless of being able to sell your house fast or not. Bridging loans are short-term securities, but interest rates could be high. Difficulties in selling your old house can cause you to pay higher rates.

If you have enough savings, on the other hand, starting your move could be done with fewer worries, though certain fees and taxes may still apply. You will need to pay the rest of your mortgage if you are under the responsibility. Utilities and maintenance will still be a burden if you leave the house vacant for a certain period. Payment of capital gains tax is a requirement if you sell your old house at least six years after moving out.

Some people opt to downsize or upsize without selling their houses, only renovating them. Renovation costs less than a new property, and it spares you from stamp duties that come with a new house.

3. Relationships and Attachments

person closing securing the box with a packaging tape

We would normally have an emotional attachment to our homes, especially if we’ve lived in it for the most part of our lives. Even if you do not move out, making great changes in the exterior and the interior of your house is still letting go all the same. And if you’ve built up great friendships in your neighborhood, moving out could cause heartbreaks.

Think deeply about what really is more important to you. Some people are driven by emotion, which makes relationships and social life a top priority for them. Others tend to be more practical and logical, regardless of the cost.

Making a decision involving our homes is a huge leap. It comes with a lot of risks, but determination and intense planning will make it work for you. After all, living in our desired homes affects our well-being, so it is a necessary step to make.

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