Dec 01, 2017

Retirement Villages Approaching Capacity – Where Will Our Seniors Live?

Occupancy of retirement villages in Australia is close to capacity, highlighting the forthcoming shortage of age appropriate housing for senior Australians in their local communities, according to new data.

The results of the annual PwC/Property Council Retirement Census show increasing numbers of older Australians are choosing to live in a retirement village, and taking advantage of hotel-style services, visiting health professionals and cash left over from the sale of their family home.

Through 2016, retirement villages across the nation were almost at their practical capacity of 93 per cent occupancy, and with the 65+ population set to grow by 5 million in the next 40 years, it is clear many seniors won’t be able to access the benefits of retirement village living in the future without significant shifts in policy.

Ben Myers, Executive Director – Retirement Living at the Property Council of Australia, said urgent action was needed at a state government level to encourage the development of new retirement villages in all our major cities.

“Nearly 200,000 senior Australians have made the informed choice to choose retirement village living, and this number is set to grow sharply in the coming decade,” Mr Myers said.

“Research shows retirement villages extend people’s ability to live independently within a secure community and, on average, access more than $200,000 in capital from the sale of their home to use how they wish.

“It is clear however that without significant improvements in state planning policy, many seniors won’t be able to access these benefits in coming years – we are facing an imminent capacity crisis.

“Many existing homes just aren’t suitable for our seniors to ‘age in place’; often they are older, contain trip hazards and very difficult to maintain. There must be more housing options for senior Australians, especially in our biggest cities where demand is at its highest, so people can live independently for longer.

“We are currently conducting research into planning barriers that are stifling the development of new retirement living accommodation and look forward to working with states to urgently solve this bottleneck.

“While entry into retirement villages remains affordable, but a lack of supply will put upward pressure on prices and make access to villages for seniors much harder.”

PwC Real Estate Advisory Partner Tony Massaro says the PwC/Property Council Retirement Census shows retirement village accommodation continues to be an affordable option for the current generation of Australian seniors who, for the most part, own their own homes.

“The national average entry price for a two-bedroom unit is at $424,000. This is almost one third less than the median house price in the same postcode,” Mr Massaro said.

“Beyond affordability, retirement living accommodation is also increasingly connected to health and lifestyle services for senior residents. More than three quarters of villages surveyed host visiting health professionals, while 28 per cent have aged care within 500 metres of the village, up from 26 per cent last year, and 33 per cent of villages are operated by an approved provider for home care.

“Every city needs vibrancy, diversity, connectivity and inclusion to truly thrive, so it’s exciting to see senior living continuing to evolve to support these needs with a myriad of amenities and care options – from dining to healthcare services to organised social outings.

“As our population ages, and more of us work longer, our cities are going to need to work for senior Australians in ways they never have before.”

The Census also showed the wide variety of services and facilities available for residents to enjoy their retirement lifestyle; 91 per cent have community centres, 84 per cent organise regular community outings and social activities, and 68 per cent allow residents to have pets.

The full summary of figures from the 2017 PwC/Property Council Retirement Census can be found at www.retirementliving.org.au/research. Operators who own and/or manage more than 56,000 retirement living units participated in this year’s Census.

This article was originally published on The Property Council of Australia

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  1. This is a great article and highlights something that is very close to our lives personally and professionally. Both of my parents have passed away but my husband’s parents are alive yet elderly and coming to the point where they’ll need care. There has been a big push for this generation to downsize or move into retired care. The reality is much more complex than the idea. At The Room Xchange, we see a massive solution to the sharing of the elderly’s homes with single people who are looking for cost-effective living. It’s a win win on both sides, removes the strain on the government to provide suitable aged care housing and also supports families with ageing parents.

  2. Before everyone including Mr Ben Meyers [who represents the financial interests of operators] gets too excited about the future and the marvellous social aspects which exist [and I can testify after over a decade living in a retirement village they can exist] let’s get the laws changed to stamp out those robbing operators who are ripping off residents by using residents’ levy money instead of using their own money to pay for expenses like painting of buildings in the village that the residents do not even own because they only lease them.

    It’s about time too that the politicians pitching for Bennelong in the next few weeks answered a question about this so here’s a question for both Kristina Keneally and John Alexander to answer – just a “yes” or a “no” will do:
    Given the stated commitment by the Federal Minister for Small Business Michael McCormack, to address the plight of retirees and residents of retirement villages and give them a “fair go”, would you if elected, support a demand that the NSW Government reverses a decision which Ms Keneally, as the then Labor Premier of NSW in 2009 dishonourably allowed to become legislated within the Retirement Villages Act 1999, which has had the effect over the last eight years of costing NSW retirement village residents who don’t own but only lease their dwellings, hundreds of millions of dollars by having to pay the external painting of operator-owned buildings which the residents do not even own?

    Ms Keneally should be able to recall that, just a few weeks before the draft changes to legislation [intended to begin on 1 March 2010] were Gazetted in mid December 2009, her then Fair Trading Minister Virginia Judge disclosed that the powerful operator’s Retirement Villages Association (RVA) had threatened Treasury to cease further building of retirement villages in NSW unless Government reversed existing wording in the draft which then clearly placed external painting costs of operator-owned buildings rightly onto operators.

    The thenoperators body [RVA] were blatantly demanding that all external building painting costs should be paid by resident-lessees even though the resident did not own the buildings they leased, and ignoring that those same resident-lessees, after paying a substantial entry fee have also committed to pay huge departure fees (in some villages between $500 to $800 per week) for that right of occupancy.

    Ms Keneally’s Government allowed that contemptible reversal to then be gazetted. That act meant that resident-lessees would thereafter be paying each year about $70,000,000, which is the amount the operators’ body then boasted to their operator members they wouldn’t have to pay because residents would now be paying instead! Such lessee obligations do not apply to commercial leases outside the retirement village industry so why are they placed on leases in retirement villages?

    Residents tried to fight back, and only 4 days before the new Regulation and changes to the Act became law on 1 March 2010, with great support in Upper House particularly by Catherine Cusack, Greg Aplin and the Rev Gordon Moyes, successfully gained the numbers to get one critical part of a particular Regulation, worded in a way to indisputably impose external painting costs onto residents, withdrawn.

    But the remaining legislation remains unclear, leaving interpretations through many Tribunal decisions unfavourable to residents since 2011.

    Surely now is the time to put these costs back onto operators. Isn’t it?

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