89% of older homeowners would consider moving, but only 19% are looking
Older New Zealand homeowners who want to move into smaller homes are being held back by a lack of suitable properties, and that is limiting a source of housing supply that could benefit buyers further down the chain, according to LJ Hooker.
LJ Hooker head of research Mathew Tiller (pictured) said adding supply depends as much on the type of homes being built as on the number.
Interest is high, but few are moving
Tiller pointed to 2026 research commissioned by Squirrel Property Finance and conducted by TRA. Of the 510 homeowners aged 55 and over surveyed, 89% said they would consider downsizing, but only 19% were actively in the market.
Tiller cautioned that the figures do not mean every older homeowner wants to sell. Some may be open to the idea but decide the available options involve too much compromise. A smaller home may still have stairs, no garage, or limited storage, or it may be far from healthcare, shops, and family. He described the decision as both financial and emotional.
The research found that 90% of those who had already downsized did so after a major life event such as retirement or a health change, and 98% regarded a garage as non-negotiable.
"Downsizers don't feel like they have time to undo bad decisions," Squirrel founder John Bolton said.
The gap has been noted elsewhere. The first tranche of the 2025 New Zealand Housing Survey identified older adults wanting to downsize as underserved. The Retirement Commission has said the supply of smaller homes, including traditional pensioner flats, has shrunk, even as some homeowners look to release equity.
Building homes downsizers will choose
Tiller said housing policy tends to count how many homes are built rather than whether they suit buyers. A new townhouse on a subdivision counts towards consent totals, but it may not suit someone who wants a single-storey home near their doctor in the suburb they already know.
"Smaller should not mean stripped of the features that make a property workable," he said.
LJ Hooker wants the next government to encourage accessible single-level homes in established communities, and to report new supply by type, size, and location rather than as a single consent total. Tiller said the firm was not backing any one party's policy, and that every party should be asked whether its plans will produce homes people will actually choose to live in.
A benefit across the housing chain
Tiller said downsizer supply could complement, rather than replace, policies aimed at first-home buyers. When a family home is sold, a growing household may buy it, freeing up that household's previous property for a first-home buyer or another mover. He conceded the effect is not guaranteed and would not fix affordability on its own.
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