Downsizing in 2026 · Updated October 2026
Changes for Downsizers: What Is Different in 2026
When we first wrote this in 2020, COVID had many older Australians rethinking their lives and their homes. Six years on, the reasons to plan your downsize are just as strong.
The rules have changed, housing is still in short supply, and how you sell and buy matters more than ever.
New Rules Working in Your Favour
Several changes since 2020 work in downsizers’ favour:
- Downsizer super contribution from 55: the age dropped from 65 to 55 (from 1 January 2023). Up to $300,000 each from the sale of a home owned for 10 years or more.
- Longer Age Pension exemption on sale proceeds: money set aside to buy or build your next home can be exempt from the assets test for up to 24 months, and deemed at the lower rate.
- Home Equity Access Scheme: the Government scheme now includes a no negative equity guarantee and lump-sum options, for those who want to stay put.
- Easier second dwellings: Victoria, Queensland and NSW have all made granny flats and secondary dwellings easier to approve or rent out.
Read more: super benefits for downsizers, reverse mortgage or equity release and building a backyard home.
Selling and Buying in a Short Market
Australia is still not building enough homes. Under the National Housing Accord the target is 1.2 million new homes in five years. By mid-2026 about 308,000 had been completed, and the National Housing Supply and Affordability Council now expects the target to be reached in late 2030, not 2029. See the August 2026 Council report.
For downsizers that cuts both ways. Well-located family homes remain in demand, which supports your sale price. But the smaller, well-designed homes downsizers want to buy are also in short supply, so competition for them is strong.
Which Option Works Best for You?
Whatever the market, the choices for the family home are the same:
- Stay and keep paying for upkeep, rates and running costs from your retirement budget.
- Sell as is and buy your downsized home.
- Improve and sell to lift the price and retire with more.
- Develop the property: hold and rent part or all, sell part, or sell all.
A review of your home by a property professional will show which of these gives you the best outcome. A review of your finances shows whether you can fund improvements or a development before you sell.
Keep the Agent Working for You
Is your local agent always putting your interests first? To win the listing, many agents raise your price expectations, then manage them down once the campaign is under way.
We work alongside you before an agent is appointed: we look at your property, recommend how to get the best price (a cosmetic refresh, a renovation, or development potential), and then keep the selling agent working hard for you. We tell you upfront how everyone in the process is paid.
Do Your Research and Planning Now
Start with a full list of your assets and debts. Then work out where you are now, where you need to be, and by when. That shows whether your retirement income is enough, and where the gaps and pitfalls are.
Once you retire, you do not want to have to go back to work to make up a shortfall. Plan now, sell into strength, and buy well.
No obligation
Thinking About Your Next Move?
Tell us about your home and your goals. We will review your position and help you choose the option that fits.
Prefer to call? 0413 108 125
Sources: National Housing Supply and Affordability Council: Quarterly Report, August 2026; ATO: Downsizer super contributions; Services Australia: Real estate assets; Services Australia: Home Equity Access Scheme. General information only, current as at October 2026. Rules change: confirm your position with a licensed adviser.
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