Oct 13, 2023

Retirement living investments could ease aged care’s financial burden

Over 260,000 Australians live in retirement communities, and with the over-65 population growing, so too will the demand for retirement villages. [Source: Shutterstock]

With Government spending on the aged care sector rising significantly – an additional $5.06 billion is going to the sector this financial year – the Retirement Living Council has presented a number of solutions that could help ease the burden and ensure funding is not burnt out sooner than later.

Key points

  • Over $28 billion in funding was announced for the aged care sector for 2023-24 in this year’s Budget
  • This is despite the sector losing more than $465 million during the first quarter of the 2023 financial year
  • Rising demand for aged care services – as a result of an expanding and ageing population – means providers require more money to deliver high-quality care and specialised services for those with complex needs
  • The Retirement Living Council (RLC) believes more direct funding for retirement living communities can enhance ageing experiences and reduce the burden of care on residential aged care

Currently, more than 260,000 Australians live in a retirement community, of which roughly 2,500 are scattered across Australia. Many of these are traditional retirement villages featuring units and houses, while a growing number of apartment communities are being constructed.

Data suggests a whopping 7.1 million Australians will be over the age of 65 by 2043 and these retirement communities are seen as a crucial piece of the housing puzzle. It’s why the RLC has put forward a range of solutions and opportunities to address the issues facing aged care to the Government’s newly formed Aged Care Taskforce. 

RLC Executive Director Daniel Gannon said the Government should see retirement living as a tool that can reduce costs and resource loads on Government-funded aged care services.

“The retirement living industry is at a pivotal juncture, evolving from a property-focused sector in years gone by to one that focuses on health, wellbeing and care,” Mr Gannon said.

“It is critical that the Government understands these opportunities as it plans for the significant increase of older Australians and aims to keep the aged care sector operational.

“The population shift forecast by the 2023 Intergenerational Report will have socio-economic impacts on the nation, including the housing supply shortage and the pressure on an already struggling residential aged care sector.”

As part of their recommendations to the Aged Care Task Force, the RLC wants to see an aged care system designed to enable and encourage care recipients to remain in their home for as long as they wish and can do so while allowing Government funding to be purely for service costs. This would leave personal contributions to care purely for housing and accommodation

Previous data from the 2022 PwC/Property Council Retirement Census already revealed that rising house prices have far outstripped those in retirement villages. Between June 2021 and December 2022, the average price of a two-bedroom unit in a retirement village increased by just 6.6%, while the average house price jumped by 26%.

With retirement living seen as an affordable option for ageing Australians, the RLC has also called on the Government to encourage the development of more retirement living accommodation. 

Mr Gannon said this would result in more positive outcomes given the rising demand for retirement living is not par with supply. Occupancy rates are almost at 90%, with limited options in the current housing market. 

But with more capital to encourage development and upgrade existing accommodation, consumer choice could be strengthened as Australians accessing aged care services could choose to live in communities with appropriately funded support services.

“Residents are on average happier, healthier and more socially connected and active than older Australians not living in age-friendly communities,” Mr Gannon said.

“Importantly, they have reduced interactions with GPs, reduced presentations at hospitals, and delayed entry into aged care – a lot of upsides for Governments. The value in these efficiencies to the Government is almost $3.5 billion per annum, meaning the Government can continue to provide health and aged care services to Australians who need it most.”

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  1. Aged care business model is being challenged . The big providers are looking to other businesses to rip off the elderly.
    It time to look at what are councils doing to ensure that retired , the elderly and pensioners in their communities have better Services at most reasonable costs including
    For their retired and elderly rate payers.
    No one should enter a business of any retirement home without legal advice re contract, costs etc. aged care the large aged care providers will be looking to other business to rip off the elderly. Time for council’s and lawyers to protect them from exploitation. Beware of home come and retirement market by the providers crying losses despite govt handouts and fleecing of funds to ncluding billions of dollars of RAD money. Enough is enough where is legal aid for retirees I.e elderly

  2. You ask important an important question as a headline for your article.
    Firstly the retirement village is a con on.
    The retirement aged is over 65 years therefore villages are realestate ventures where tenants will not be cared for. They are in fact units same as body corporate without any protection of same or power.
    Agedcare pensions are for now available not for 55 year olds but for those that are 10 years or more older.

    Aged care has nothing do with the new prospects being lobbied as addressing aged care costs.

    The lobby group by suggesting there premesis are available for those over 55 years and over. Councils should provide the services such as meals on wheels, cleaning gardening etc and those costs being met from rates.
    Get real aged care Royal commission exposed the profiteering of providers. Thankfully attitude re shed care needs to be changed aged care recipients are NOT customers or consumers. The are aged care recipients and some are just require basic daily living assistance that councils should be doing as part of good urban planning living other aged care recipients need residential care within their community because they in need of experience clinical geriatric nursing care along with basic living needs assistance.

    Councils should be contributing to communities basic living needs. Over the years they seem only to engage contractors tot empty rubbish bins weekly. Councils through rate charge rates that the should use to provide basic living needs of those in their communities at reasonable costs . This ensure creates jobs for council to employ council workers who are accountable reliable and safe because of council responsibility that their employers are suitable.

    55 years is a joke to suggest that this is about aged care!!
    The motive is only about profits not care.
    Councils and legal aid should be called in to assist with the necessary solution to aged care safety and costs

    I suggest you get copies of agreements between retirement village owners the 55 year old plus who they are wanting as tenants providing assisting that used to be a community I.e neighbours, family and councils were important


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