Not everyone planning their retirement has $500,000 or more to spend on a new home. The good news is there are affordable downsizing options available, and with a little research, you can find a community that suits your lifestyle and budget.
Rental retirement communities
Rental retirement communities often have the lowest entry costs. Instead of purchasing a home, you pay a bond and then ongoing rent — either weekly or monthly.
The rent is usually set as a percentage of the Age Pension plus Rent Assistance. In some communities, rent also covers extras like meals, activities, and access to shared facilities. This makes budgeting easier and can free up money for other living costs.
Serviced apartments in retirement villages
Another affordable option is serviced apartments within retirement villages. These are often priced below $258,000, which allows residents to qualify for Rent Assistance.
Serviced apartments can offer additional support, such as meals, cleaning, and maintenance. For many retirees, they strike a balance between affordability and independence.
Land lease communities
Land lease communities are different again. Here, you buy the home but lease the land it sits on. Because you are renting the land, you may still be eligible for Rent Assistance, even if the home itself costs more than $258,000.
These communities typically don’t charge exit fees, which can make them more transparent than some retirement village contracts. However, they also usually don’t offer guaranteed buybacks if you want to leave — so it’s important to think about resale and demand in the area.
Key things to compare
When looking at affordable downsizing options, don’t just focus on the purchase or rental price. Make sure you understand:
- Ingoing costs – bond, purchase price, or entry fees
- Ongoing costs – rent, service charges, maintenance fees, or extras like meals and activities
- Outgoing costs – how much you’ll get back when you leave, and how soon
- Impact on entitlements – whether the arrangement affects your Age Pension or Rent Assistance
Final thoughts
Affordable downsizing options are out there — from rental villages to serviced apartments and land lease communities. The key is to do your homework, visit communities in person, and compare the full financial picture.
