The first annual Retirement Living Report joins the stable of detailed granular sector reports StewartBrown first established in 1995 with the Aged Care Financial Performance Report highly regarded by the Department of Health, Disability and Ageing.
For the first retirement survey, 79 retirement living operators participated, incorporating 455 individual villages with 31,000 village units, with the results analysed by StewartBrown. The Report has been released two days before the 2024 PWC - Property Council Retirement Living Census is released.
StewartBrown's survey found:
- Retirement villages were already going into a continuum of care model,
- Average age of retirement villages nationally now sits at 30 years,
- 80% of new residents are entering their village under a traditional DMF model, with almost 12% entering under a flexible DMF arrangement,
- National average DMF is 5 years, with the average length of stay 8.4 years,
- National average monthly service fee is $588 for a two-bedroom unit and $654 for a three-bedroom unit,
- Three-bedroom units are in high demand, selling faster (67 days on average) than two-bedroom units (106 days).
"With the demographic shift to persons entering the retirement living sector increasing to 78.4 years with one in three residents being over 85 years of age, the sector is moving to a combination of accommodation and continuum of care settings. The Survey combines granular analysis of the financial and demographic attributes of the sector with an overlay highlighting the increasing demands to provide access to care and wellbeing for residents," said Lachlan Scott, StewartBrown Retirement Living - Analyst & Consulting Team.
The survey found the people entering retirement villages are getting older, with average age of incoming residents increasing steadily to be 78.4 years, with the average length of occupancy 7.4 years. One in three residents is now over the age of 85.
"This ageing profile is fundamentally reshaping village operations, and the services residents expect. Care, wellness, accessibility, and community engagement are no longer 'nice to have' – they are essential components of a modern village offering," the report stated.
"To further demonstrate the changing age and care requirement demographics of residents, 58% of villages are co-located with residential aged care."
The survey of the 79 retirement living operators participating found average occupancy sits at 88.8%, with longer turnaround periods to get units ‘market ready’ a key factor.
Single females represent 58% of the residents living in the retirement living communities surveyed, followed by couples at 24%, and single males at 18%. The age profile analysis shows 78% of residents are over 75 years, with 33.1% of residents aged over 85 years.
"This demographic reality underscores the need for operators to evolve and to deliver environments that support ageing in place. The FY24 Survey has a larger proportion of Not For Profit participants due to the increased focus on residents requiring increased care and wellness needs. The for profit (private) sector is not exempt from this shift and increasingly are moving their strategic direction accordingly. It is anticipated that the Survey participants will have an increasing number of For Profit participants in future years to assist with their strategic initiatives," the report stated.
The StewartBrown Retirement Living Report found between FY25 and FY29, survey participants project supply to grow by just 17% - well short of what’s needed to keep pace, let alone meet the 22% forecast growth in the 75+ population over the same period.
"Most of the future pipeline will come from greenfield developments, expected to contribute 4,635 new units. Brownfield sites - expansion and redevelopment of existing villages - will add another 2,750 units. While these are important numbers, they won’t bridge the gap alone. The mix of new product remains weighted towards independent living units (79%), with assisted living (6%) and co-located residential aged care (10%) making up the balance," states the report.