Downsizing your home later in life has many advantages and may free up cash to invest for income. However, you need to consider this decision carefully and be wary of financial pitfalls that could leave you with less than expected.
The latest insights from FNB, drawing on South African property transaction trends and customer data between 2015 and 2025, show that older people are active in the property market. The proportion of buyers aged 56 and older increased from 14% in 2015 to 19% in 2025.
Vanashree Naidoo, Product Head of Home and Structured Lending at FNB, says today’s retirees have different priorities from previous generations. “They are living longer, remaining active for longer, and placing greater emphasis on convenience, affordability and lifestyle,” she says.
The trend is to move to a smaller, more manageable home. FNB’s analysis shows that among seniors who sold a property and purchased another, the proportion choosing a smaller home increased from 54% in 2015 to 62% in 2025. Downsizing becomes even more pronounced with age, rising from 50% among homeowners aged between 55 and 59 years to 71% among those aged 80 and older.
Furthermore, the proportion of freehold properties purchased by seniors declined from 75% to 66% over the 10-year period, reflecting growing interest in sectional-title developments that often offer enhanced security, lower maintenance requirements and lock-up-and-go convenience.
“For many retirees, it’s about finding a home that better aligns with the lifestyle they want to enjoy in their golden years. That could mean less time spent maintaining a large property, lower ongoing costs, improved security or being closer to family, healthcare facilities and essential amenities.”
Naidoo highlights the importance of evaluating property decisions within the broader context of retirement planning. “Your property can play a significant role in shaping your financial future. Before deciding whether to move or not, you should understand how much equity you have built up, the costs associated with buying and selling, your future affordability and how your housing needs may evolve over time,” she says.
Financial considerations
While there are many other things to consider when moving home, such as location, proximity to loved ones, access to healthcare facilities, and the lifestyle offered by the type and location of the home you choose, it’s important to understand the financial implications of your decision.
• Smaller is not necessarily cheaper: In an article for the Rode Intelligence website, Grant Smee, CEO of Only Realty Property Group, warns that because of the high demand for retirement housing, the difference between what you can sell your home for and what you can buy for may be less than you think. “Many retirees are trying to sell large, freestanding homes in inland ares where buyer demand is relatively weak. At the same time, retirement estates, assisted living communities and secure sectional title developments continue to attract strong demand, driving prices higher. As a result, many retirees are finding that downsizing is not as affordable as they had anticipated,” Smee says.
• Costs of selling and buying: The costs of selling and buying could be higher than you realise. There are numerous costs associated with selling a property, such as the costs of obtaining rates clearance and compliance certificates, bond cancellation fees, and estate agent’s commission. On buying, you are looking at conveyancing fees, transfer duty and, if you still need a bond, bond registration fees. There may also be tax to pay on the capital gain on your home. (For gains exceeding R2 million on a primary residential property, a portion of the gain is added to your taxable income and taxed at your marginal rate.)
• New monthly housing costs: Depending on the type of property, you may end up with high monthly payments. If you are moving from a freehold property to a sectional-title or gated development, you will likely be able to reduce your insurance costs, but this may be offset by high levies. A smaller property will typically incur lower rates, electricity and water costs, but if you are moving to a different municipality, this won’t necessarily be the case.
• Moving expenses: These can add up. Hiring a moving company and furnishing a new home can be costly. Consider how you may fund these one-time expenses by budgeting in advance of the move.
