There’s a particular kind of problem that only successful industries get to have. Not the grinding struggle of a sector in decline, but the sharp frustration of one that can see exactly how big the opportunity is and keeps hitting the ceiling trying to reach it.
That was the atmosphere at this year’s National Retirement Living Summit in Brisbane, where operators, financiers, consumer advocates and researchers gathered to take stock of an industry that is, by almost every measure, in rude health. Occupancy at record highs. Waitlists lengthening. Residents reporting high satisfaction. A demographic wave (18 per cent of Australians are now aged 65 or over, rising to one in four by 2066) building behind it like a force of nature.
And yet the sector can’t build fast enough, can’t connect residents to the aged care they need, isn’t giving prospective residents the financial information required to make sound decisions, and is only beginning to grapple with the dementia challenge heading straight at it.
“We’re structurally full in an industry that has happy residents,” said Aveo CEO Tony Randello, with a candour that set the tone for the day. “That’s not quite right.”
The macro picture was set by Tim Lawless, Executive Research Director at Cotality, who opened the summit with a data-heavy reality check that framed everything that followed.
The demand case for retirement living is almost self-writing. Australians aged 65 and over hold around 30 per cent of the nation’s wealth despite representing 18 per cent of the population, and the vast majority of that wealth sits in residential property. Brisbane housing values have risen more than 200 per cent over the past two decades. The family home, for many retirees, has become an enormous asset they’re ready to unlock, if operators can give them a compelling enough reason to do so.
“The best operators in the room are going to be the ones that can convince prospective retirees about their willingness to cash out that equity to move into a lifestyle upgrade,” Lawless told delegates.
But here’s the problem: the sector isn’t building enough to absorb that demand, and the reasons go deeper than planning red tape.
“I don’t think the main reason we’re not seeing enough building anymore comes back to the planning process,” Lawless said. “I think the much more important feature that’s blocking more supply coming to market now is simply that it’s really expensive to do so.”
Construction costs have surged. Labour is scarce, competing directly with major infrastructure projects across every capital city. Financing hurdles have risen. And across the country, approved developments sit stalled: shovel-ready on paper, economically unfeasible in practice.
Randello, who joined Aveo six years ago when the company was carrying around $700 million in vacant stock, described the reversal in almost surreal terms. That vacancy problem has been solved entirely. The new problem is the opposite. “We may need to leave some money on the table this cycle and make it up again later,” he told the room, a pointed challenge to the investment committees and capital partners who set the hurdle rates that determine whether a project proceeds.
Kevin McCoy, CEO of Levande, which has seven active construction sites and is targeting 200 new units in 2027, scaling to 300 per year beyond that, offered a more optimistic read: “There’s a housing shortage now, and there’ll be an even worse one afterwards. You’ve got to look through all of that and back yourself.”
While operators wrestled with feasibility, consumer advocate Rachel Lane, Principal of Village Guru, brought a different kind of urgency: the hundreds of thousands of dollars ordinary Australians are losing simply because nobody explains the financial model to them properly.
Lane has spent years translating the retirement village contract for prospective residents, and her concern is sharpening. Waitlists are growing, she told the panel, but she’s unconvinced the people on those lists understand what they’re signing up for.
“When we’re talking about wait lists, I would question how well informed people are on that waitlist. Do they know what type of apartment they want? Do they know how they want to pay for it? Do they understand the impact of choosing those different options?”
The stakes of that knowledge gap have risen sharply since the introduction of support at home co-contributions last November, which materially changed the calculus between paying via a deferred management fee versus paying a larger sum upfront.
Lane walked the panel through the numbers using a $1 million apartment as an example. Choosing to pay 20 per cent upfront rather than deferring to the back end saves approximately $120,000–$150,000 in deferred costs, generates around $15,600 more per year in pension entitlements (around $156,000 over a decade), and reduces support at home co-contributions by roughly $8,000 per year. Over a 10-year stay, the difference between the two payment models amounts to approximately $386,000 for a single resident.
“The DMF model was designed to be an affordable housing model,” Lane said. “But forcing people to pay that way isn’t always affordable. Sometimes it’s just cheap. And it’s causing them to reduce or lose their pension and pay more towards support at home.”
Her challenge to operators was direct: give residents a genuine choice. And not purely out of duty of care. She made the commercial case too. Taking $200,000 upfront rather than $300,000–$350,000 in a decade can, depending on your weighted average cost of capital, be the more profitable outcome, while also funding refurbishments sooner. “It’s not just that you are doing the right thing by your customer. It can also enable you to fund your refurbishments.”
If supply and consumer literacy represent the sector’s visible pressure points, the aged care crisis is the one building quietly until, suddenly, it isn’t quiet at all.
Tracey Burton, CEO of Uniting NSW/ACT, brought a bracing clarity to what’s happening at the intersection of retirement living and residential aged care. The numbers are stark: Australia needs 10,000 new aged care beds a year, and last year 5,000 people died waiting to be assessed for a home care package.
“The shortage of aged care beds we’re facing as a country, we will not be able to build our way out,” Burton said flatly. Residential aged care homes remain unviable on feasibility. The pipeline is nowhere near sufficient. And the pressure is flowing directly into retirement villages.
Randello confirmed it from the operator’s chair. He’s never had as many conversations about residents who need aged care and simply cannot access it. “It used to happen for a couple of months and then a place would come up. That’s not happening anymore.”
Aveo’s response has been structural: every new development now includes a co-located residential aged care parcel. Levande is investing in wellbeing officers, currently funded in half its villages, who McCoy noted measurably lift resident wellbeing scores on the Australian Unity/Deakin index. As AI begins absorbing more administrative load, McCoy sees an opportunity to redirect that capacity into human connection.
Burton also raised a caution the room would do well to sit with. As operators develop closer affiliations with aged care providers through co-location and referral pathways, there’s a real risk of replicating what has played out in New Zealand, where residents of affiliated villages get preferential access to aged care, and everyone else is left behind.
“We’ve already got a supply-demand crunch,” Lane noted. “And now we’re creating haves and have nots when it comes to who gets aged care.”
Threading through all of it was a quieter but equally urgent challenge: the sector is housing an increasing number of residents living with dementia or heading towards a diagnosis, and most villages weren’t designed with that in mind.
Marie Alford, General Manager of Growth and Innovation at HammondCare, speaking at the summit, argued that the work of supporting people well with dementia doesn’t begin at diagnosis. It begins at the front gate.
“It’s about knowing the person. Understanding the importance of story. Maintaining dignity and autonomy.”
Her framework for operators was characteristically practical: evaluate your wayfinding, because disorientation is distressing for anyone and far more so for someone whose cognition is changing. Look at your staffing model and ask whether you’re relying solely on an admissions coordinator and village manager for a community of hundreds. Build a whole-of-community approach that extends to residents, not just staff. And invest in the care partnerships that allow people to remain in their homes longer, rather than moving to residential care before they need to.
The demographic dimension matters here too. Among Australians aged 85 and over, more than half of women live alone, compared with around 42 per cent of men. Women also tend to enter retirement with fewer assets and live longer, meaning the need for community, support and affordable design is not a niche consideration. It’s the mainstream reality of who is moving into retirement living right now.
What the summit made clear, across the economics, the operations, the care and the design, is that Australia’s retirement living sector faces a moment of reckoning that good occupancy numbers can’t paper over.
The demographic case has never been stronger. The wealth is there. The demand is real. But the sector is being tested on execution: on whether it can build at scale, give consumers the information they deserve, absorb the pressure of an aged care system in crisis, and design genuinely for the people who will live in these communities for the rest of their lives.
Tracey Burton, in her final summit appearance as Uniting CEO, chose advocacy as her parting message.
“Being active in the advocacy space, supporting the Council, collaborating with other bodies. Try really hard to find what is going to serve senior Australians better.”
For a sector that has everything going for it, that might be the most important work ahead.
What’s needed is more rental retirement villages that aren’t owned by such companies as Baptist care and others.
By whom should they or can they be held?