Downsizing a Home — Why Fewer People Are Making the Move

A recent Globe and Mail article suggested that the best time to plan to downsize is “when you’re still excited about what comes next.”¹ The argument is straightforward: it’s better to decide on your own terms, before health issues or practical limitations force a decision. Waiting too long can mean the choice is driven by necessity rather than preference, often under pressure from family or advisors.

Those who successfully transition tend to act proactively, motivated by what their next home offers, whether it’s simplicity, convenience or a better lifestyle fit. Downsizing can also provide financial advantages by unlocking home equity and reshaping both financial position and lifestyle. A smaller home typically reduces maintenance, utilities and property tax bills, while freeing capital for other priorities.

Yet fewer people are choosing to downsize. Many prefer to remain in their homes as long as possible. A recent survey found that among those over age 50, only 11 percent had a desire to downsize.¹

This shift reflects broader changes in housing economics and retirement planning. In the past, more homeowners expected to use real estate as a retirement resource. Today, that assumption is less common. Longer life expectancy, improved health in later years and higher overall wealth have contributed to a greater ability to remain in place. At the same time, the rising costs of seniors’ housing can reduce the net financial benefit of downsizing, limiting the equity released in practice. Several other factors may also influence the decision:

Emotional impact. Downsizing is not purely financial. Long-time homes are often tied to memory, routine and identity — factors that can delay decisions long after the financial case is clear.

The cost of moving. Selling expenses, including legal fees and commissions, can account for a meaningful portion of proceeds. Preparing a home for sale (e.g., staging, repairs) adds further expense, as do moving costs and updates needed to settle into a new property. The process itself can also create administrative complexity.

Market uncertainty. Limited inventory has made it difficult to find a suitable property for some, while market price fluctuations can affect what a sale will ultimately yield. In many markets, prices have shifted from their highs.

Trade-offs in housing flexibility. Moving to a rental or community setting may reduce maintenance responsibilities, but can introduce uncertainty around lease terms, fees or future cost increases. Ownership typically provides greater control and predictability.

However, as life circumstances evolve, including changes in health or mobility, the question often shifts from whether downsizing is financially optimal to whether current housing still fits day-to-day life.

This is why early exploration is recommended, before the decision becomes forced by circumstances. It helps to avoid rushed decisions. Spending time in a potential new location across different seasons can help clarify lifestyle fit. In the case of condominiums, reviewing bylaws and restrictions, such as pet rules or renovation limits, well ahead of time can materially affect the decision.

Ultimately, downsizing may be less about finances alone than aligning housing with changing priorities. And, while the home may become smaller, the opportunities can expand in meaningful ways.

^{1. https://www.theglobeandmail.com/investing/personal-finance/article-what-is-the-right-age-to-downsize-your-home-its-all-about-timing/}

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