Why downsizers like to buy off-the-plan with confidence with iCIRT

downsizers like to buy off-the-plan with confidence with iCIRT

Equifax spoke with Mark Macduffie, CEO & Co-Founder of Downsizer, a property-technology company that connects 55+-year-old purchasers with property developers, about why buying off-the-plan is attractive to downsizers.

EFX: Why are downsizers interested in buying new, off-the-plan properties?

Macduffie: At this stage of life, it's convenient and comforting to know that there's much less to worry about with a new property. An existing property could have many maintenance problems, higher bills and tiresome upkeep, costing more than initially anticipated.

More and more off-the-plan developments have luxurious features and are designed by professional, respected architects and interior designers. Buying off-the-plan from a reputable property developer has a lot of benefits when you're downsizing. It's a much more straightforward, secure and less competitive purchasing process, as there's ample choice in one location. There's also plenty of time before settlement, making the transition easier and more organised, with less stress.

The recent introduction of iCIRT from Equifax into the residential construction industry is providing downsizers with the peace of mind that buying off-the-plan is a good choice. Now buyers have the transparency to make an informed choice about the quality of their developer. They can choose to deal only with credentialed developers and builders who have the capability and financial adequacy to deliver successful projects.

EFX: Why is now a good time to downsize?

Macduffie: It is never a bad time to downsize! There are many reasons to downsize, like being closer to family, lower maintenance, better lifestyle. The longer you wait to make the move, the harder it gets. With rising interest rates and cost of living, now is the time to make these decisions and capitalise on value while it's there.

Another great reason is that people can use the equity in their currently owned home to fund a new purchase and use the remaining released equity to boost their super and improve their cash flow. It's all about creating a better financial future to be in a position to enjoy your later years.

The federal government's superannuation downsizer contribution enables people to make a one-off downsizer contribution into their super of up to $300,000 per person ($600,000 per couple) from the proceeds of selling their property. From 1 January 2023, the minimum age for this contribution dropped to 55. If you're claiming the age pension, you now have two years (or three years in extenuating circumstances) to organise your financial affairs before the proceeds from selling your home impact Centrelink's assets and income tests.

EFX: Describe a typical downsizer

Macduffie: People who choose to downsize are typically asset-rich and cash-poor. They're heavy with property, credit and equity and low on super and other financial assets. They're ready to transition into a new, more manageable and convenient home and improve their lifestyle.

Downsizers want the opportunity to exchange on a new property without having to drain their savings or sell their home first and rent in the interim. They want to benefit from their released equity and boost their super - or their kids' inheritance! And importantly, they want the process to be less challenging, risky, and time-consuming.

Downsizers make the change for many reasons, and as such, we are seeing a variety of unique scenarios play out. For example, a recent client was a 79-year-old downsizer with very little remaining savings and growing debt from a loan with no income streams to pay it off. He could no longer maintain his property and struggled with rising utility bills when we helped him secure a brand-new property with fantastic amenities that suited his lifestyle. With this change, he was able to regain his financial independence.

Another recent example is a couple who used our platform to downsize from their very large home and buy two brand-new apartments – one for themselves and one for their kids! So, in this case, we're helping the whole family, not just the downsizers.

EFX: What are the main reasons downsizers are hesitant to buy off-the-plan?

Macduffie: Their hesitation is often fuelled by horror stories that downsizers have heard from others or in the media. They might have even had their own negative experiences with untrustworthy builders and agents who haven't met their needs or been transparent. There is the fear that things might go wrong, like a delay in the settlement, the builder going insolvent or doing sub-par quality work.

EFX: How do you think using an iCIRT-rated developer will alleviate these fears?

Macduffie: Ultimately, it's all about trust. Downsizers who choose to work with an iCIRT-rated developer can have the peace of mind that their project is in good hands and that their hard-earned savings are for a property that can be relied on in the future.

To be iCIRT-rated, developers undergo a rigorous and independent assessment. A 3-gold star or higher rating indicates that a builder or developer has demonstrated credibility in an evidence-based analysis of their business. The more stars, the more confidence downsizers can have that their building professionals will likely deliver a reliable outcome.

EFX: How is Downsizer, alongside partners like iCIRT, offering new purchasing solutions for Downsizers?

Macduffie: To downsize without selling in a way that is safe and secure, downsizers deserve an evolved option that doesn't compromise their lifestyle, home-buying requirements or financial situation. We're able to instil buyer confidence as our platform has been built with trusted partners and integrations like iCIRT from Equifax, reducing some of that initial feeling of risk and reluctance for a potential buyer.

Negotiating the whole process of downsizing is much easier on our platform. Downsizers can find a reliable developer, instantly check eligibility for the zero cash deposit and search our marketplace for a suitable new home all in one place. The standard paper-based applications that are often challenging and time-consuming are digitised and streamlined too.

Go to the iCIRT website to learn more about the new construction industry five-star ratings.

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