Today’s issue is packed full of development stories and talking to For Profit and Not For Profit executives it is getting harder and harder.
From what we’ve been told over the past few weeks, anyone building a retirement living village today needs 40% to 45% more product than they did five years ago in order to make the build project viable than they did five years ago.
It’s widely reported construction costs have risen 30% in the past five years. Compared to residential, retirement village developers carry the added exposure of having to deliver communal facilities and amenities in their build to attract customers.
More product becomes critical
67,000 retirement village units need to be built to meet existing levels of demand from older Australians. Of this amount, only 18,000 are currently planned, according to the Retirement Living Council.
Third.i Co-Founder Luke Berry, told The Weekly SOURCE 12 months ago, a 50% increase in construction costs over two years forced Third.i to ask council to allow an additional 36 apartments to make The Merewether Residents in Newcastle, NSW, viable.
In business, the rising costs of producing a product ends up being passed on to the customer. This means a higher amount per square meter is charged to incoming residents.
Ambitious operators like Glen Brown at Reside Communities, are achieving this. Glen knows that if the product is right – the client will pay. Read the story on the prices at Reside’s Fairway Carindale in Brisbane for proof.
Traditionally, Not For Profits have been far more conservative when it comes to pricing. Recent activity suggests this is changing with operators such as Uniting, BaptistCare and Anglicare moving their price point beyond $1 million at a number of their communities.
Perhaps times are changing.
