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Selling Your Northern Beaches House for an Apartment Could Cost You Hundreds of Thousands

Downsizing can simplify life, but selling a Northern Beaches house for an apartment may sacrifice land exposure, incur large transaction costs and reduce long-term wealth.

TL;DR Selling a Northern Beaches house and buying an apartment can release substantial cash and reduce maintenance. It can also create six-figure transaction costs, introduce ongoing strata expenses and reduce exposure to scarce residential land. That does not mean every apartment purchase loses money. Some apartments outperform houses over particular periods, especially scarce three-bedroom, waterfront or boutique properties. The financial risk appears when owners sell a strong land-backed asset, pay large moving costs and then spend or underinvest the released equity. Why downsizing looks financially attractive The basic idea is appealing. Sell a large house, buy a smaller apartment, remove the mortgage or release capital and reduce gardening, repairs and cleaning. For many owners, that …