Your home has lost value. But are you actually poorer?

Australian homeowners have watched billions wiped from property values, but for those who aren’t selling, does it really change anything? Jellis Craig director Dallas Taylor says older Australians may have good reason to ignore the scary numbers.

Australian homeowners have supposedly lost billions as property values retreat, prompting the sort of headlines guaranteed to make anyone with a mortgage or retirement plan sit up and take notice.

But readers aren’t necessarily buying the idea that a fall in the value of their home automatically makes them poorer.

When a recent property story focused on the wealth wiped from Australian homeowners as values fell, one reader offered a much simpler assessment.

“If you still live in the same house you lived in six months ago, you are no poorer.”

Hundreds agreed.

And Jellis Craig director Dallas Taylor reckons the reader has pretty much nailed it.

“That’s about spot on,” Taylor told Starts at 60.

A loss on paper isn’t always a loss in life

For someone who owns their home and isn’t planning to sell or borrow against it, the latest valuation may have surprisingly little bearing on their everyday finances.

“It really doesn’t mean a lot when it’s all said and done, unless they’re using the equity in their home,” Taylor said.

“For most people, their home is their highest point of wealth. So unless they’re using that equity to start a business, fund another purchase, or do something else with it, it doesn’t really have an impact.

“Everyone is a little less wealthy on paper than they were a few months ago. But does it have a real impact? No — unless they were planning to use that equity for something.”

That distinction is particularly relevant for older Australians.

Many Starts at 60 readers didn’t buy their homes six months ago, or even five years ago. They’ve potentially owned them for decades and experienced several property cycles along the way.

“Most of your audience is actually in a fortunate position. They’ve probably been in their homes closer to 20 years rather than just six months, so those homes are worth a lot more than what they paid,” Taylor said.

He points to a property he recently assessed. Its owner paid about $1.9 million a decade ago and Taylor believes it may be worth roughly the same amount today.

“If he’d bought it 20 years ago, he might have paid $1 million and he’d be a million dollars ahead today.”

The starting point can dramatically change the story being told about property wealth.

The number that matters when you downsize

A paper loss can become very real the moment you decide to sell.

That’s relevant for Australians in their 60s and 70s who have spent years regarding the family home as a major part of their retirement wealth and are now contemplating downsizing.

Taylor doesn’t think they should automatically judge a sale against what their home might have fetched at the top of the market.

“My attitude has always been this: if the sale allows you to do what you want to do — what your plan was — then it makes no difference,” he said.

“If you’ve got a price on the table that lets you retire, move to a lower-maintenance lifestyle, have the freedom to travel more, spend more time with the grandkids, then you just move on and enjoy it.

“If the price doesn’t allow you to do those things, that’s a different conversation. But if the sale lets you execute your plan, then it just makes sense: sell, move on, live your life, and away you go.”

Homeowners also aren’t usually selling in isolation. They’re buying into the same market.

Taylor recently met a 65-year-old client who wants to sell and head for the coast. He knows he may receive a couple of hundred thousand dollars less than he could have 12 months ago, but the properties he’s looking at have fallen too.

“His motivation is to go somewhere coastal and change the pace. He understands, ‘It is what it is.’”

Could falling prices actually be good news?

One of the most supported reader comments raised another question: shouldn’t we also be talking about homes becoming more affordable?

For years, many older Australians have watched children and grandchildren struggle to get a foothold in a property market that raced away from wages and savings.

“There are definitely a lot more opportunities, and properties are more affordable than they were at the peak,” Taylor said.

“Part of your audience — parents and grandparents — should be excited, because their kids or grandkids are now in a better position to purchase a home.”

People looking to upgrade can also benefit.

Someone selling for $100,000 or $200,000 less than they might have achieved at the peak could potentially save considerably more on the larger, more expensive property they buy next.

“So it’s all relative. Upgraders in this market are actually ahead.”

‘The window is closing’

For many older sellers, however, the decision isn’t purely financial.

It’s also about how they want to spend the years ahead.

“Once people get into that older age group and it’s clearly a lifestyle choice, they tend to just move on,” Taylor said.

“Especially when people get into their 70s and mid-70s, the money side of it becomes less important to a degree. It’s more: ‘This is the lifestyle I need. The window is closing.’

“So they want to take advantage of the time they have and live the best life they can for the next five, 10, 15 years.”

A home may have been worth $1.5 million at the top of the market and $1.3 million today. But for an owner contemplating retirement, travel or a sea change, the decision isn’t necessarily as simple as waiting for that $200,000 to return.

“If selling at $1.3 million still allows them to make that next step and live the life they want, I’d tell them to go for it.

“If it lets them move into the next phase of life and supports their retirement or lifestyle plan, then yes, sell and move on. If it doesn’t, then no — you’d reconsider.”

Are we close to the bottom?

Taylor says buyer conversations have also changed after months of uncertainty.

“We feel like if we’re not at the bottom, we’re pretty much at the bottom. That’s been a consistent conversation over the last two to three weeks,” he said.

“For the last six months, the message was, ‘We’ve still got some price to come back. It’s still dropping.’ Now the conversation with buyers is changing. Buyers are starting to say, ‘Actually, it’s a good time to buy. Maybe I will buy something.’ So the tide is definitely turning.”

That uncertainty hasn’t disappeared. The International Monetary Fund has warned the RBA may need to raise rates further if persistent inflation and the global energy shock keep adding to price pressures. Financial markets are now pricing an 87 per cent chance of another 25-basis-point increase at the RBA’s end-of-month meeting.

For homeowners, that could put renewed pressure on borrowing power and property prices. But it also reinforces Taylor’s broader point: trying to perfectly time the market can be difficult when interest rates, inflation and buyer sentiment can shift so quickly.

Where prices go from here remains uncertain, and Taylor’s view reflects what he’s seeing on the ground rather than a guarantee of what comes next.

For Australians who have owned the same home for 10, 20 or 30 years, though, the latest valuation isn’t necessarily the most important number.

For those preparing to sell, what that money allows them to do next may matter a great deal more.