Key takeaways
1 in 4 Aussies plan to move within the next two years, with 67% citing rightsizing as a key motivator.
There is a discrepancy between what Australians seek from their home vs what is currently available on the market: Aussies were deterred from moving due to a lack of suitable housing options, with individuals reporting a lack of outdoor space (67%) and internal living space (46%) as concerns.
Older Australians (55+) struggle to find suitable homes with practical features and proximity to essential services.
Despite the affordability appeal, a lack of suitable housing options, especially in apartments (lack of outdoor space and internal space), deters many from moving.
As Australia's property market continues to evolve, one factor that is increasingly adding pressure is the trend of "rightsizing."
A new study commissioned by Temple & Webster highlights how this phenomenon is reshaping housing demand.
The report, Finding the Right Fit: The Future of Rightsizing in Australian Housing, points to growing competition for larger dwellings in sought-after locations, pitting downsizing Baby Boomers against upsizing families.
Rightsizing is a strategic shift in how Australians view home ownership.
Rather than simply upgrading or downsizing, it's about finding a home that aligns perfectly with an individual’s current stage in life, financial situation, and lifestyle needs.
This shift in mindset is creating new pressures in an already stressed housing market.
Why rightsizing is on the rise
The research reveals that one in four Australians plan to move house in the next two years, and renters are even more inclined to move, with one-third indicating plans to relocate.
A significant driver behind this movement is rightsizing.
In fact, 67% of respondents cited rightsizing as a key motivation for their planned move.People are not just moving to accommodate more space, but also to downsize their homes, reduce maintenance, and better suit their changing needs.
Interestingly, two groups stand out in this rightsizing trend.
Those with no spare rooms are eager to upsize (28%), while those with three or more spare rooms (25%) are seeking to downsize.
This means that we have two major demographic groups—growing families looking for larger homes and older Australians hoping to downsize—competing for the same housing stock.
A mismatch between housing needs and availability
One of the key findings of the report is the disconnect between what Australians want in a home and what's currently available on the market.
Lack of outdoor space (67%) and insufficient internal living space (46%) were the top reasons Australians were hesitant to move, with many reporting that available properties didn’t meet their needs.
The lack of suitable housing options is felt particularly strongly by older Australians.
- Also read:Australia’s 50 most expensive suburbs to rent revealed
- Also read:Latest property price forecasts for 2025 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Melbourne property market forecast for 2025
- Also read:Sydney property market forecast for 2025
- Also read:Brisbane’s property market forecast for 2025
The over-55 demographic is struggling to find homes that are practical, accessible, and near essential services.
Interestingly, for many in this group, having a lock-up garage was a top priority, showing how even small details can make a significant difference when choosing a new home.
Apartments: a necessary but unpopular solution?
The research shows that, despite their unpopularity due to the lack of outdoor space and internal living area, apartments are becoming a necessary option.
Affordability is a huge driving factor here—61% of 25- to 54-year-olds would consider moving into an apartment due to cost, and 25% of total respondents indicated they were transitioning to an apartment or townhouse because of lower maintenance and proximity to amenities.
While Australians may not be entirely sold on apartment living, this is where developers and policymakers need to step up.
Addressing key pain points—such as providing communal outdoor spaces, improving soundproofing, and incorporating multi-functional spaces like indoor co-working areas—could make apartment living far more attractive.
Lucy Sutherland, Director of Insights & Trends at Temple & Webster, pointed out that:
"Addressing these needs could transform the housing market, encouraging more Australians to embrace apartment living."
Strategic solutions to Australia’s housing crisis
The Temple & Webster report highlights several key strategies to alleviate housing pressure:
- Addressing affordability: The affordability crisis, especially for younger Australians, continues to be a significant barrier to home ownership. There is a growing need for long-term rental options and the development of more affordable housing. Without tackling this issue, many Australians will continue to be priced out of home ownership.
- Enhancing apartment living: Improving apartment design could help ease the housing supply crunch. By offering better soundproofing, communal gardens, and shared facilities like co-working spaces, developers can make apartment living a more appealing option for those looking to rightsize.
- Innovating housing design: Flexible housing design is essential for the future. Homes need to be adaptable, with multi-functional rooms such as a home office that can double as a guest room, especially as remote work becomes more common.
- Meeting the needs of older Australians: Older Australians are looking for homes that are practical, accessible, and close to essential services. For many, apartments could be the right solution, provided they meet their preferences for privacy, personal space, and parking.
- Focus on evolving lifestyle needs: Developers need to focus on creating housing options that align with Australians' evolving life stages. Larger apartments near major activity centres could help meet the needs of both downsizers and upsizers.
- Exploring co-housing models: Co-housing offers a solution to housing accessibility by encouraging resource-sharing among families. This model could provide economic and social benefits by fostering a sense of community while reducing housing costs.
A call for change
As Sutherland noted, the housing landscape in Australia is at a crossroads.
Rightsizing offers a potential solution for many Australians, but it will require a concerted effort from policymakers, developers, and the real estate industry to create a resilient and inclusive housing market.
As demand for more flexible and affordable housing options grows, the industry must adapt to meet Australians’ needs at every life stage.
For investors and homeowners, understanding these trends presents an opportunity.
The demand for well-designed, flexible housing will only continue to grow, and properties that can meet these evolving needs will be highly sought after in the years to come.
