How retirement living is being reshaped
Your super is helping fuel a retirement living boom – but would you live at a university?
Call for stronger protections
Older people are vulnerable when it comes to buying into a retirement village. That’s why National Seniors Australia (NSA) is calling for strengthened and nationally uniform laws for retirement villages to ensure the rights of older people are protected.
We regularly hear from people who have been bamboozled by complex contracts for retirement villages, finding out later that they are up for significant exit fees down the track.
One of the key difficulties facing seniors is the lack of consistency across state and territory borders, with individual jurisdictions responsible for retirement village laws.
For example, in Queensland, village operators are required to pay back an entry fee after 18 months if a home is unsold, but in Tasmania it is only six months.
To find out more about the changes we believe will better protect you and improve retirement village legislation, click here.
Better protection is part of our bigger Better Housing campaign priorities, including:
Enable home care recipients to downsize without pension penalties
Home sharing education and incentives
Increase rent assistance payments
Introduce a stamp duty concession for eligible seniors in all states and territories
Include “accessible housing” design standards in the National Construction Code (NCC)
Create a capital grants scheme for the construction of rental housing suitable for older people.
Retirees want to live close to health support and a New South Wales university has obliged, partnering with a developer to include a retirement village and aged care facility in its planned Health and Wellbeing Precinct.
Research and education will be embedded within the precinct, allowing community-university collaboration on aged care health, including dementia and mental health.
The Keyton-University of Wollongong project also aims to benefit the broader Illawarra community, offering employment, university placements, and research opportunities on campus, as well as much-needed housing for seniors.
“The Keyton independent living community within the precinct will allow residents to age in place surrounded by a landscape that supports a healthy and active lifestyle,” the university said.
More information about the intergenerational university village is available on the Innovation Campus website.
The precinct is an innovative example of movement in the booming retirement-village sector as it gears up to take advantage of expected growth opportunities.
By 2040, the over-75 population is expected increase from around 2 million to 3.7 million. But over the next five years, just over 12,000 new units are expected to be built. This means demand is expected to outpace supply – which is why developers are interested.
Some developers, supported by superannuation companies, are accelerating their entry into the sector, and growth, by acquiring existing retirement village stock.
Keyton is purchasing existing retirement accommodation from Lendlease, which is exiting the sector, while The Living Company (formerly Scape Australia) is taking over Brookfield’s 10,000-unit Aveo retirement living business for more than $3 billion.
Other sector movements include housing provider GemLife’s forthcoming debut on the ASX. GemLife is a land lease operator, providing greenfield plots for rent in a housing estate, typically taken up by budget retirees.
“There’s a lot of activity going on across the sector, around various forms of capital, looking at this sector as an alternative class of assets,” Keyton chief executive, Nahan Cockerill, told the Australian Financial Review (AFR).
“The cash yield may be lower than what [investors] usually get from commercial real estate. But ultimately, the long-term growth opportunities in this sector are there.
“It’s one of those sectors where there’s an ageing demographic and there’s huge opportunity in the long run around this portfolio. We see more capital looking at this and trying to get an understanding of the business model.”
Developers are attracted to a sector vacancy rate of 4%. The average cost of a unit is 59% of the median house price, according to a Property Council/PwC survey. The survey found more than half the new facilities will be apartment-style buildings or at least multi-level. Increasingly, operators include home care services either directly or through a third-party provider.
The AFR says the average price of a Keyton unit is around $650,000, and residents buy in through various arrangements including a deferred management fee that is paid on exit, or a bond paid upfront.
The AFR says the luxury retirement segment accommodation is also expanding. On the north side of Sydney Harbour, Keyton’s Greenwich units are selling for between $2 million and $6 million.
In Melbourne, in inner-city Richmond at the former GTV9 television studio site, the Kennedy Place facility is 90% sold out with units costing from $900,000 up to $2.7 million for the penthouse.
