CoreLogic identifies that the average Australian median home value increased $143,320 to $709,803, or 22.1%. This includes metro and regional homes, and that increase in wealth is tax free for the 89% of all people 65+ that are homeowners.
And from the chart above, regional homeowners had the best result, close to a 26% increase – in 12 months. This is where many retirement villages are located.
Against this background, most village operators have a policy of annualised increases of 3%, which doesn’t make sense.
It is important to match these increases in value for several reasons. The first is that the sector and residents missed almost all price growth between June 2017 and 2020 because of the sales hit that emanated out of the damaging ABC Four Corners program; it needed to make up for the lost sales and lost profits to fund capital investments and added services.
The second is the number of residents that enjoy a share of capital gains. There is a responsibility to maximise that share.
Third is the importance of achieving a pricing that is not perceived as cheap; a responsible price delivers confidence.
This is the time to act confidently; price is not a factor.
