"People have been talking about the downsizer market for years and I never believed it as we were not seeing it on the ground," he said.
Financial Review rich lister Tim Gurner sold 97 per cent of the apartments in a new Melbourne high-rise project in just two weeks after offering larger apartments to the downsizer market.
Mr Gurner's Albert Place Residences on Bowen Crescent in South Melbourne originally featured 160 apartments, but was reduced to 140 after downsizers chose to amalgamate apartments to create large residences.
The resulting layout created eight half-floor residences all worth between $4.5 million to $5.5 million with the project generating total sales of $140 million.
Mr Gurner said he took a calculated risk by offering a third of the apartments in the tower, designed by Elenberg Fraser, as three-bedders to "test the scale and breadth of the downsizer market" but that it had "paid off in spades".
"It is my belief that sales to investors will come to a grinding halt for the next quarter, which the government will no doubt regret once they see the implications of their policies playing out in the market," he said.
Albert Place Residences is due for completion in late 2019 and Crema Constructions is set to undertake the $55 million build.