Why Aussies refuse to downsize for city

Australians are clinging to their laundries, spare rooms and car spots — even if it means ditching city life — in a defiant rejection of the downsizing dream.

New research from Compare the Market reveals just 18.8 per cent of Australians would sacrifice space to live closer to the CBD, while a staggering 71.3 per cent either won’t downsize or have no desire to live in the city at all.

But while most of the nation is holding onto space, property experts say buyers are increasingly flipping the script.

RELATED: Overlooked VIC suburbs winning in 2025

‘Major lift’: Shock Aus city tops price boom

‘Crippling’: Tradies in turmoil over meltdown

Compare the Market’s general manager of money Stephen Zeller said Australians were drawing clear lines around which home features they would and wouldn’t compromise on — and it wasn’t what you might expect.

“Knowing which home amenities you definitely want and which you’re willing to compromise on can help you narrow down which properties are right for you,” Mr Zeller said.

“Using comparison tools can also help you find a competitive interest rate on offer.”

Sydneysiders were more open to downsizing than the national average, but still showed strong resistance to losing essential home features. Picture: NewsWire / John Appleyard

Laundries topped the list of non-negotiables, with 50 per cent of Australians saying they would not give them up — followed by car park spaces, 38.9 per cent, garages, 34.7 per cent, and spare rooms, 30 per cent.

Buyers were most willing to ditch pools, 57.9 per cent, garden sheds, 42.1 per cent, and backyards, 35.8 per cent, to get closer to the city.

Melbourne based buyers advocate Cate Bakos said the national data came as a surprise, because her clients are increasingly choosing location over space.

“That actually surprised me — because I’m seeing the opposite,” Ms Bakos said.

“People are much more willing to give up space to be close to cafes, culture and lifestyle.

“They want to be where the action is.”

Just 18.8 per cent of Australians would downsize for city living, but Melbourne and Brisbane buyers are bucking the national trend.

Melbourne buyers are giving up garages and backyards to live closer to the action and demand is surging in inner suburbs. Photo: iStock

Ms Bakos said many buyers had moved away from car ownership entirely, opting for public transport, ride-share services and car share schemes.

“They’d rather save that cost and use the money elsewhere,” she said.

“The focus has shifted to experiences, lifestyle and social connectivity.”

But the buyers agent said one feature remains a deal-breaker for many buyers:

“Move-in readiness. Buyers are not interested in renovators right now,” Ms Bakos said.

“The builder shortage and renovation costs have turned people off.

“A turnkey home is gold.”

Ms Bakos added that confidence was being driven by major infrastructure upgrades, particularly Melbourne’s $15bn Metro Tunnel, set to reshape commuting when it opens later this year.

“It’s the kind of change buyers will feel in their daily commute,” she said.

“It builds confidence and convenience.”

“The Suburban Rail Loop might be the long game, but right now, the Metro Tunnel is what people are excited about.”

Experts say the Suburban Rail Loop may reshape Melbourne long-term, but buyers are focused on faster wins closer to the CBD.

The Metro Tunnel is set to transform Melbourne’s inner-city commute and buyers are already anticipating the benefits. Picture: David Geraghty

McGrath Wynnum-Manly’s Gaby McEwan says post-Covid lifestyle shifts are driving families back to the coast, and they’re not looking back.

McGrath Wynnum-Manly principal Gaby McEwan said buyers, particularly in Brisbane were still chasing space, but not for land size alone.

“It’s not necessarily about acreage. It’s about a change in pace,” Ms McEwan said.

“They want a backyard, a garden, a safer community and access to the water.”

Ms McEwan said a growing number of young families were selling up in Brisbane inner-city pockets like Newstead and West End to secure lifestyle homes in seaside suburbs such as Wynnum and Manly.

“They’re not just trading sideways,” she said.

“In some cases, they’re paying more for a smaller block, just to live near the water.

“The Esplanade used to be quiet. Now it’s buzzing. People discovered it during lockdowns and never left.”

Manly Harbour’s bayside lifestyle is luring buyers from Brisbane’s inner suburbs, many paying a premium for space, schools and sea breezes. Picture David Clark

The McGrath Wynnum-Manly principal said even basic homes are being snapped up by buyers keen to get into the suburb.

“We recently sold one for $925,000, it was full of asbestos and hadn’t been touched in decades,” Ms McEwan said.

“But it was on a great street, and the buyers were happy to renovate just to get in.”

Ms McEwan said a wave of locals who grew up in the area were now returning after years of inner-city living.

“They’ve seen the value of their units go up, and now they’re either selling or holding and buying again here,” she said.

“It’s a smart move, and once they’re back, they never want to leave.”

State-by-state: Who’s least willing to compromise?

Victorians were the most attached to their laundries, with 53.2 per cent unwilling to give them up.

Queenslanders were more open to ditching the backyard, 38.5 per cent, and only 10.9 per cent were willing to lose a laundry.

New South Wales came in close to the national average, but Sydneysiders showed slightly greater willingness to downsize for location.

South Australians were most attached to having a garage, with 42.9 per cent unwilling to let it go.

Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.

MORE: Block star reveals mistake that devalue homes

‘Major lift’: Shock Aus city tops price boom

These Aussies may never be able to buy a home

david.bonaddio@news.com.au

The post Simple reason Aussies refusing to downsize for city appeared first on realestate.com.au.

As borrower expectations for personalized, timely communication rise, loan officers are turning to AI-powered tools to stay competitive. Intelligent automation is no longer a future vision but a present necessity that helps lenders scale personalization, deepen client relationships, and uncover new opportunities. Ryan Young, founder and CEO of Fello.ai, recently shared how AI is transforming mortgage professionals’ ability to connect with clients. With deep real estate expertise and a proven record of innovation, Ryan has grown Fello into a platform used by 20,000+ real estate agents, including 500+ WSJ Real Trends teams. Under his leadership, Fello reshapes engagement by turning enriched data into action, enabling professionals to do more with the relationships they already have. He emphasizes that embracing automation today is key to thriving in an industry that is evolving faster than ever.

“When it comes to AI, it’s not AI vs. humans — it’s AI plus humans. “

HousingWire: The mortgage industry has long been built around transactions, but today’s borrowers expect more ongoing value. What does it take to shift from a transactional mindset to a relationship-driven one — and how does data play a role in making that personalization real?

Ryan Young: There’s a strong synergy and a growing emphasis on a customer’s lifetime value. The key to optimizing that value is through relationships. If approached with a transactional, one-and-done mindset, it is tough to preserve the margins necessary to scale a business and withstand the slower, tougher period in the industry. 

Loan officers realize margins are too tight to treat prospects as one-time deals. Building relationships, facilitating transactions, and staying connected can create multiple opportunities. Macroeconomic conditions have only reinforced this shift, prompting more LOs to ask: “What do I need to do to become their lender for life?”

HW: With so many lenders struggling to stay top of mind between transactions, what role do you see Fello playing in helping them build stronger, longer-lasting relationships with their clients?

RY: One of the reasons we fall out of mind is because we try a one-size-fits-all approach to marketing, by sending broad, generic messages that don’t reflect the audience’s diverse needs. We have changed that by enriching the loan officer’s database with detailed behavioral and contextual data, allowing for precise segmentation and highly relevant messaging. This enables lenders to engage clients with the right message at the right time, fostering deeper, longer-lasting relationships. In a world where consumers expect personalized experiences, like they get from Amazon or Netflix, relevance isn’t a luxury; it’s now a necessity.

HW: Beyond staying in touch with past clients, how is Fello helping lenders build a stronger business that consistently generates new transactions and unlocks more value from their existing database?

RY: The real opportunity isn’t just staying in touch — it’s knowing when and how to engage. By leveraging behavioral and property data, lenders can spot signals that a homeowner may be ready to act, like tapping equity for renovations. Rather than opening with a product pitch, the focus should be on delivering value first: market insights, ROI-focused upgrade ideas, or equity tracking tools tailored to their journey stage.

It comes down to timing and relevance. With the right data, lenders can deliver personalized, useful content, build trust, and introduce offers organically, right when interest and intent align. That’s where we’ve seen the strongest engagement and long-term results.

HW: Beyond staying in touch with past clients, how is Fello helping lenders build stronger businesses that generate new transactions and unlock more value from their existing database?

RY: Fello has helped nurture over 40 million contacts — and what we’ve uncovered is eye-opening: more than 80% of the contacts were missing a verified property address or had outdated information. This data gap is one of the biggest roadblocks for lenders in converting leads and growing their pipelines. Without accurate address data, targeting the right homeowners, personalizing their outreach, or prioritizing high-intent leads effectively is nearly impossible.

Fello solves this by applying intelligence to enrich and clean databases by verifying addresses, confirming homeownership, and removing outdated property info. This data hygiene has proven transformational for lenders trying to grow their pipelines more effectively.

But beyond just cleaning data, Fello’s mission is to empower lenders to truly own their business. That means giving them the tools, such as AI-powered client segmentation and campaign management, insights like market trends and client behavior analysis, and autonomy to make data-driven decisions. By decentralizing access to this kind of technology, Fello helps lenders generate more transactions, unlock more value from their database, and build a more resilient, self-sustaining business.

HW: AI is reshaping how many industries operate — how is it starting to influence the mortgage and real estate space in particular?

RY: AI is already touching every part of our product, and the backbone of our entire roadmap.

We’re already seeing real efficiency gains in the mortgage and real estate space, especially through our Fello product. This product liberates loan officers and agents from administrative duties, allowing them to reallocate their focus entirely to high-impact, client-facing activities— building relationships and providing strategic advice.

This shift is creating a critical divide in the industry. Those who proactively embrace AI will achieve greater scalability and accelerated growth, able to accomplish significantly more with fewer resources. Those who hesitate may find themselves at a competitive disadvantage, unable to match the speed and efficiency of AI-powered operations.

HW: Do you think the biggest barrier to AI adoption right now is how precisely users have to communicate with it? If so, is it even worth learning that skill if natural, human-like interfaces will be available in just a few years?

RY: That’s something that I’ve battled with internally. As a tech CEO who’s not very technical, I’ve found AI tools intimidating, wondering if I’m asking the right questions or why I’m not getting the results I want. But I’ve learned that patience and persistence are key. Like any new skill, there’s a learning curve, and the payoff is worth it. 

I think it’s essential to start learning how to use AI now. Those who take the time today will have a significant advantage as these tools improve. And they’re improving fast—not years from now, but within the next quarter or two. Soon, our interactions with these platforms will be purely conversational, allowing us to ask for complex outputs like a complete customer segment or an entire campaign workflow without needing any technical background.

That’s why getting comfortable with AI now is so valuable. Even a basic understanding can be incredibly powerful, and a simple curiosity and willingness to explore will take you a long way.

HW: Looking ahead, what does a modern, always-on mortgage business look like — and what should lenders be thinking about today to get there?

RY: Adopting technology that unlocks efficiency, productivity, and profit year-round. 

I recently spoke with a loan officer who said he was too busy to take on more business. But when I asked about his pipeline in the off-season, he admitted he struggles to pay the bills. That’s the reality of seasonality in real estate. But it doesn’t have to be. When your business is powered by automation and a well-nurtured database, you can generate leads year-round, smoothing out the feast-or-famine cycles and building predictable momentum.

That’s our goal: not just to amplify your busy seasons but to make your slower periods more productive. When your systems work for you, your database starts working, too, creating opportunities even in a cool market.

When it comes to AI, it’s not AI vs. humans — it’s AI plus humans. For anyone nervous about the future, here’s the truth: the people and businesses that embrace AI will unlock capabilities they’ve never had before by freeing up time for what matters most: building relationships and delivering excellent service. That’s how we future-proof this business.

Click Here

Mortgage applications decreased by 3.9% for the week ending May 30, according to data from the Mortgage Bankers Association (MBA). On an unadjusted basis, the index fell 15% during the week marked by the Memorial Day holiday.

But economists and loan officers say the year-to-date landscape looks much better.

“Mortgage applications decreased over the week, but continued to exhibit annual gains, with purchase applications running 18% ahead of last year’s pace,” Joel Kan, MBA’s vice president and deputy chief economist, said in a statement. 

Some top LOs have also observed an increase in volume this year, despite volatility in the market. Chicago-based Benjamin Cohen, who works at Rate, reported a 36% year-over-year increase in his business volume, which includes 20% to 25% for nonqualified mortgages (non-QMs).

“People know interest rates aren’t 3% anymore, so I don’t think that’s an issue. And I don’t think the tariff increases [imposed by the Trump administration on other countries] are really having an impact on the housing market,” Cohen said.

At the end of the day, according to Cohen, consumers understand that if rates are not at 3% but their families are growing and they need to move, there’s a clear message.

“The rate doesn’t mean anything if it’s not working for you,” he said. Cohen usually emphasizes borrower needs, including home prices that are affordable, down payment capacity and monthly spending comfort.

Mortgage rates have hovered between 6.8% and 7% since April. Last week, rates for most loans moved lower, according to Kan.

MBA data shows the average rate for 30-year fixed-rate conforming mortgage contracts (loan balances of $806,500 or less) was 6.92%, down from 6.98% the previous week. Jumbo loans (greater than $806,500) also averaged 6.92%, a slight decrease from 6.93% the week before.

The refinance index decreased by 4% from the previous week but remained 42% higher than the same week one year ago. Meanwhile, the seasonally adjusted purchase index declined by 4% from the prior week. The unadjusted purchase index dropped 15% week over week but was still 18% higher than the same week last year.

The refinance share of mortgage activity rose to 35.2% of total applications, up from 34.6% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.1%. ARMs typically gain market share when rates are elevated, as borrowers can access lower initial rates compared to traditional fixed-rate mortgages.

By product, the Federal Housing Administration (FHA) share of total applications continued to tick up, increasing from 17.9% to 18.7% during the week. The U.S. Department of Veterans Affairs (VA) share of applications increased 30 basis points to 12.6% while the U.S. Department of Agriculture (USDA) share remained unchanged at 0.5%.  

“Government purchase applications were little changed over the week driven by a slight increase in FHA purchase applications,” Kan said. “Refinance activity fell across both conventional and government segments and the overall average refinance loan size was the smallest since July 2024, as potential borrowers hold out for larger rate drops.” 

There are plenty of factors you can’t control in the broader economy, Amy Corr writes, but there are ways to implement more control and consistency in your business.

U.S. home inventory hit a record $698 billion in April, a 20.3 percent increase from the previous year. However, sales aren’t keeping pace, a new analysis from Redfin shows. While listings are rising, buyer activity remains muted, leaving many homes sitting unsold far longer than usual.