New Zealand’s housing debate needs to give greater attention to older homeowners who want to move into a smaller, more manageable property but cannot find a suitable home in the community where they already live.
LJ Hooker Head of Research Mathew Tiller said increasing housing supply was not only about building more dwellings. It was also about providing the right mix of homes so people can move as their needs change.
“Housing is a cycle. When a homeowner moves from a large family property into a well-designed smaller home, that move can help free up housing for other households further down the chain,” Tiller said.
“Downsizing should always be a choice. Many older New Zealanders want to remain in the home and community they know, and policy should support ageing in place as well.
“But people who are ready to move should have genuine options. Too often, the smaller homes available do not match what downsizers need in terms of accessibility, location, storage, parking, privacy and connection to services.”
The first tranche of the 2025 New Zealand Housing Survey identified older adults seeking to downsize as an underserved group and reported constrained housing mobility, with downsizers struggling to find suitable options.
Te Ara Ahunga Ora Retirement Commission has also noted that homeowners may want to downsize to release equity or move into a more manageable home, but that the supply of smaller properties, including traditional pensioner flats, has reduced.
Research commissioned by Squirrel Property Finance and conducted by TRA in 2026 surveyed 510 homeowners aged 55 and over. The results showed that 89% would consider downsizing, but only 19% were actively in the market.
Tiller said that research should not be interpreted as meaning every older homeowner wanted to sell.
“The figures suggest many people are open to downsizing, but that does not mean they are ready to move,” he said.
“A homeowner may be open to downsizing in principle but decide the available alternatives involve too much compromise. A smaller floor area is not automatically a better fit if the home has multiple stairs, no garage, limited storage or is a long distance from healthcare, shops, transport, family and friends.
“The decision is both financial and emotional. People are not simply exchanging one building for another. They are deciding whether to leave a home full of memories and whether the next property will support the life they want.”
Tiller said housing policy often focuses on how many homes we build, rather than whether we are building the homes people actually want.
“A consent for a compact townhouse in a new subdivision may add to the national total, but it may not help an older homeowner who wants single-level living in an established neighbourhood close to a medical centre and social connections,” he said.
“Likewise, a retirement village may suit some households extremely well, while others prefer conventional freehold, unit-title, rental or community housing.
“There is no one-size-fits-all downsizer home. What is needed is more choice across price points, locations and forms of ownership.”
LJ Hooker said the next Government should encourage:
“Smaller should not mean stripped of the features that make a property workable,” Tiller said.
“A well-designed two-bedroom home with a garage, storage, outdoor space and step-free access may be far more attractive to a downsizer than a larger but unsuitable townhouse. Developers and planners need to understand what people actually want to buy.”
The current Government has introduced a building-consent exemption for qualifying small stand-alone dwellings and is progressing planning and urban-development reforms. The Green Party’s housing policy prioritises accessible housing and public housing, while Labour has said it will focus on affordability, first-home access, rental security and building more homes.
Tiller said LJ Hooker was not endorsing one party’s mechanism.
“Every party should be asked the same question: will your policy produce homes that people at different life stages will actually choose to live in?” he said.
“Planning reform can enable supply, finance initiatives can help projects proceed, and accessibility standards can improve design. But success should be measured by completed, occupied homes in the locations where demand exists.
“A housing programme can look good on paper but still miss the mark if it delivers the wrong homes in the wrong places.”
Tiller said suitable downsizer supply could complement, rather than replace, policies focused on first-home buyers and new construction.
“When an established family home comes to market, it can be purchased by a growing household. Their previous home may then suit a first-home buyer or another mover,” he said.
“The chain is not automatic, and one downsizer does not solve housing affordability. But helping people move means we can make better use of the homes New Zealand already has.
“For decades, housing policy has concentrated heavily on the entry point into ownership. That remains important, but we also need to think about every stage that follows: growing families, separation, retirement, accessibility and changing health needs.”
“Downsizing should not be framed as telling older people to leave their homes,” Tiller said.
“It should be framed as giving people a better choice when they are already considering change. If we build homes that fit their needs, we can improve quality of life, release established family housing and create a more flexible property market.
“Housing supply is not just about how many homes we build. It is about whether those homes allow people to live well through every stage of life.”