How One Downsizer Used Equity And Timing For An Off‑The‑Plan Move

Most downsizers think the danger is buying too small. In my experience, the real risk is timing: buying off‑the‑plan, selling too late (or too early), and discovering your “retirement plan” has turned into a cashflow headache.

In this case study, I’ll walk through how a Sydney couple used a tightly controlled equity release and smart timing to move into an off‑the‑plan apartment with one move, no fire‑sale, and no sleepless nights.

In plain terms: a safe downsizer off‑the‑plan strategy means (1) only releasing as much equity as your future retirement budget can support, (2) locking in realistic settlement windows, and (3) keeping 6–12 months of living costs plus mortgage repayments in cash or true offset after settlement. Get those three mostly right and the rest is detail.

The couple: asset‑rich, time‑poor, and wary of risk

Let’s call them Peter (68) and Maria (65).

They owned a freestanding house in Sydney’s Eastern Suburbs, debt‑free, worth around $3.2m. Super between them: $750k, plus $120k in cash. No debts. Peter had just retired; Maria was working part‑time.

They wanted:

• A new, low‑maintenance apartment near friends and family.
• One move only – no renting in between.
• At least $1m released for super and a cash buffer.

They’d read stories of off‑the‑plan horror – valuations short, buyers forced to sell other assets, retirees dipping back into work. They’d also seen neighbours do it well. If you want another flavour of this scenario, I’ve written on similar Eastern Suburbs downsizers staying local here: /insights/eastern-suburbs-downsizers-equity-risk-stay-local-case-study and /insights/dover-heights-downsizers-equity-risk-case-study.

Their main question: “Can we buy off‑the‑plan now, then sell later, without gambling our retirement?”

Step 1: Treat downsizing as a balance‑sheet restructure

The mistake I see most is starting with “What can we buy?” instead of “What should our balance sheet look like after we move?”

What I tell my clients: downsizing is a once‑in‑a‑lifetime balance‑sheet restructure. You’re choosing the split between:

• Home (non‑income producing, but lifestyle critical)
• Super (tax‑effective income stream)
• Other investments
• Cash buffers

We modelled three versions of their “after” picture.

Target “after” position

We agreed a target:

• New apartment: about $2.2m–$2.4m
• Super: at least $1.2m–$1.3m (post‑downsizer contributions)
• Cash/offset: $200k–$250k
• Ideally debt‑free, but open to a small, temporary loan during construction.

That meant from the approximate $3.2m home value, they could comfortably allocate ~$2.3m to the new place and free ~$900k for super and cash once sale costs were factored in.

Key point: We set the purchase budget after agreeing retirement numbers – not the other way around. This echoes a principle I use in other downsizer work: decide the balance‑sheet split first, then shop inside that box.

Step 2: Choosing the right off‑the‑plan contract

They found a boutique off‑the‑plan apartment nearby:

• Advertised price for their preferred 3‑bed: $2.35m
• Estimated completion: 24–30 months
• Deposit: 10% on exchange

The big risk in any off‑the‑plan purchase is the settlement gap: you commit now, but your borrowing power, interest rates and property values can all change by handover.

For a deeper dive into those risks, see my investor case study on a 10% valuation shortfall: /insights/case-study-investor-manages-10-percent-valuation-shortfall-completion.

For Peter and Maria, we negotiated three critical contract points with their solicitor:

1. A realistic settlement window

Developers love optimistic dates. We pushed for:

• A clear range: “Settlement estimated in Q2–Q3 2028” rather than a vague single month.
• A maximum sunset date so they weren’t stuck indefinitely.

This matters because we’d later align the sale of their house to that window.

2. Flexibility on minor plan changes

They were sensitive to layout. We clarified what counted as a “material change” giving them options if the final product drifted from the brochure.

3. Deposit protection

Instead of putting the full 10% in cash from their savings, we:

• Used $120k cash plus a small equity‑backed facility to top up if needed.
• Ensured deposit funds were held in a proper trust account.

Treat downsizing as a full balance-sheet restructure, not just a property swap.

Step 3: Safe equity release – how much is actually sensible?

The next question: how to fund the deposit and hold their current home.

They had options:

1. Sell first, rent, then buy at completion.
2. Buy off‑the‑plan now, release equity from the existing home to fund the deposit and flexibility, then sell closer to completion.

Option 1 was safer on paper but failed their “one move” test and exposed them to volatile rents. So we focused on controlled equity release.

Our equity‑release rules

I use two practical guardrails for retirees:

1. Total debt secured against the existing home ≤ 25–30% of its conservative value.
2. Buffers: At least 3–6 months of total living costs plus stressed repayments in cash or true offset after the equity release, and 6–12 months after final settlement.

Their home’s conservative value: $3.0m (we deliberately haircut the agent’s appraisal).

• 30% of $3.0m = $900k max theoretical debt.
• We chose a much lower ceiling: $500k.

We ended up with this structure:

• New equity‑release loan: $400k (interest‑only for 5 years, variable)
• LVR: ~13% against the $3.0m conservative value

We immediately parked $250k of that in an offset – this was not for spending, it was their “emergency and settlement” buffer.

What the $400k facility covered

• $235k: 10% deposit on the new apartment
• $25k: initial legal and advice costs, contingency
• $140k: stayed in offset as buffer

Their original $120k cash savings remained intact as living‑cost buffer during construction.

This gave them almost $260k in cash/offset after costs – more than 12 months of living expenses plus stressed interest on the $400k facility, well inside the guideline from earlier articles that recommend 6–12 months of stressed repayments plus living costs for retirees.