If you build it, they will come. Or so the saying goes.
But new research from Squirrel, looking at what downsizers really want from their homes, has shown that's not always the case.
The latest findings—the second installment of a three-year study we've commissioned (via The Research Agency) to help developers better understand their market—have identified a major intention-action gap across the downsizer market, with a lack of compelling options keeping many stuck in homes they know don’t suit their future needs.
And the untapped opportunity for developers who can get it right is huge.
While 89% of homeowners aged 55+ are open to the idea of downsizing to get into their ‘optimal’ future home, only 19% are actively in the market to buy.
Of the remainder, 46% are passively looking, while 35% are settled homeowners with no intention to move—and approximately 4 in 10 of the latter group expect to stay in a home that doesn’t suit their needs as they age.
Squirrel founder, JB says the research highlights a complex mix of emotional, logistical and financial factors that stop people from taking action, making for a tough—but not impossible—nut to crack for off-plan developers hoping to unlock the downsizer market at scale.
“We know that people feel a higher degree of risk and uncertainty around buying off-plan anyway. But for downsizers, there’s this added fear of ‘is it really worth giving up a home I know and love, is it worth the cost and effort of moving, if there’s a chance I’ll regret it?’ For first home buyers, if a property isn’t quite right, it’s just a step on the ladder—you can always move on. Downsizers don’t feel like they have time to undo bad decisions, and honestly, they don’t want the hassle.
It means the bar, the sort of home that’s going to make them go ‘yep, this is worth it’, is really high. And a lot of what we’re building at the moment just isn’t meeting it. They see new builds that meet the technical definition of downsizing—lower maintenance, lower-cost—but that feel like they demand too much compromise in terms of things like space, privacy and storage. Downsizers want something that feels like a step forward in terms of lifestyle. They want to downsize on hassle, not their lives.
“The challenge for developers then is, firstly, getting the design right. There’s an overwhelming preference for single-story, standalone homes with garages—essentially something smaller, easier, but still familiar. Then if you can find ways to reduce uncertainty throughout the decision-making process—showhomes and walk-throughs to demonstrate quality, or wraparound services that help remove the hassle of moving or selling their existing home—even better.”
Key research findings:
- The majority of people see downsizing as a natural next step as they age, but that’s not enough to spark action—89% of existing homeowners aged 55+ would consider it, but only 19% are actively in the market to buy a new home to live in in future.
- Emotional factors—attachment to their current home, overwhelm, and fear of getting it wrong—are as significant as practical or financial considerations.
- That means downsizing typically happens reactively rather than proactively—90% of homeowners aged 55+ who have previously downsized say the move was triggered by major life events (retirement, health changes, or family shifts).
- Current housing options leave downsizers feeling uninspired. They meet the functional definition of downsizing—smaller, lower maintenance—but require too much compromise on space, privacy and quality.
- Off-plan developments face an additional hurdle, with uncertainty around quality, timing, and financial risk reducing appeal.
- Downsizers overwhelmingly prefer standalone, single-level homes—96% of current homeowners aged 55+ would somewhat or strongly consider a standalone home, and 94% say their optimal home for later life is single-level.
- Garages are a non-negotiable—98% of homeowners aged 55+ say their optimal future home for later life living has a garage, not just for secure vehicle storage, but also providing safer entry into the home.
- Ample storage, spare rooms and flexible spaces are also essential, helping downsizers maintain independence and continue living the way they do today. There’s a strong resistance to homes that feel too packed in, uniform, or lacking in character.
- Location is also key, with a strong preference for secure, quiet, established neighbourhoods close to shops, healthcare, and social networks.
- To unlock downsizing demand, developers need to reduce perceived risk around the process while creating homes that feel like an upgrade—not a compromise.
Ankit Sharma, CEO of Registered Master Builders, says, “For this demographic, it actually isn’t about downsizing, it’s about life-sizing. People want better lifestyles—and right now that means space. Flexible space. But there are some mega-trends playing out in the background which mean we are going to have embrace high-density housing in future. It’s inevitable.
“Take climate change and the impact on insurance, for example. Eventually there will be parts of Auckland, Wellington, Christchurch—our big cities—where it’s just too expensive to build and live. We’ve also got an aging population who don’t want to go into retirement villages, they’re staying put for as long as possible—which means we need to be building to house the next generation. As that shift towards higher-density starts to happen, people’s perceptions of housing, and what they want from a downsized home, will shift as well.”
Bolton adds, “One of the other things that came through in the research, which was kind of surprising, was challenging the idea that downsizing is often about releasing equity. In many case, this demographic are willing to pay the same, perhaps more in some cases, for something that ticks the right boxes.
"For some, that might mean a smaller home in a nicer neighbourhood—somewhere they’ve always really wanted to live—where they’re close to family and friends, and the supermarket’s just down the road. For others, it’s not about downsizing on space at all. They still want the three-bedroom house and garden, they just want something really modern, with less land, that’s going to be easier to maintain.
“Get the product right, and remove as much of the risk as possible, and you give people the confidence to act,” says Bolton.
About the research:
At Squirrel, we’ve got a deep understanding of New Zealand’s property market—and over the past few years, one thing has become clear: there’s a gap between what’s being built and what people actually want to live in.
That’s why we’ve commissioned a multi-year programme of research (in partnership with market research agency TRA) to dive into what Kiwi really want and need from new-build homes. Our goal is to give builders and developers a better understanding of the market, and in turn help them to deliver better, more thoughfully-designed projects that buyers actually want to live in—meaning better outcomes for all involved.
This year, for phase two, we’ve focused on downsizers. Our experience (as both advisers and lenders) tells us this is one market segment where existing new build options too often fall short—meaning there’s a huge opportunity for developers who can get it right. And we want to help bridge that gap.