Downsizing homes 'may not be the best option'

Friday 03 September 2010

Article by Mozo

Australian homeowners looking to cash in on rising property prices by downsizing may find that the financial gain is not worth it, it has been suggested.

Lachlan Partners property adviser Ana Bennett observed that families who aim to cut their debt by downsizing are still being squeezed by the prices of new properties.

"One problem with downsizing is that, while prices may have risen such that it is tempting to sell and unlock money, the prices for the kinds of properties you might want to downsize to have also risen," the consultant told News Limited.

Meanwhile, Loan Market's chief operating officer Dean Rushton observed that some households are downsizing in order to help out their adult children.

The trend suggests that more Aussie property owners may be inclined to compare home loans as they look to refinance. Earlier this week, it was reported that up-and-coming non-bank lender Yellow Brick Road is aiming to offer first-time home buyers a more competitive option by removing the need for home loan applicants to show proof of savings.

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