Federal Budget 2026: Boosting much-needed retirement living development?
Productivity push aims to unlock retirement village development
- Supply gap: Sector needs 51,000 extra units by 2030 to meet demand
- Regulatory shake-up: Governments targeting faster approvals and simpler zoning
- Construction boost: Reforms back modular housing and lower compliance costs
- Economic impact: Productivity package tipped to cut business costs by $10bn annually
The retirement living sector appears to be getting a fillip to start building new or redeveloping villlages.
On 1 May, Treasurer Jim Chalmers revealed a productivity package including cutting regulatory costs by $10 billion a year for business, including for project approvals, tax system compliance, international trade and building regulations.
The latest StewartBrown Retirement Living Performance Report states:
“Maintaining the sector’s current penetration rate – where 12% of Australians over 75 live in retirement villages – will require significant new supply. To stay on track, StewartBrown estimates the sector needs to deliver 51,000 additional units by 2030.
“With the national stock currently estimated by StewartBrown to be sitting at around 229,000 units, this represents a required growth of 22%. Yet the pipeline is lagging. Between FY26 and FY30, report participants project supply to grow by just 16% – well short of what is needed to keep pace to meet the 20% forecast growth in the 75+ population over the same period.”
Over the past 10 years, the sector has only been building between 1,000 and 2,500 new village homes a year at best.
In line with the reform priorities agreed in 2024, the Commonwealth will provide $72.5 million to the New South Wales Government after the implementation of key reforms.
The State Government will spend $67.5 million to implement changes to their commercial planning and zoning rules, including:
- Speeding up approval processes by increasing the number of developments going through the fast‑track pathway from 45% to 75%;
- Modernising zoning definitions and laws to allow more businesses to operate without lengthy development approvals – including broadening the number of businesses that can operate in employment zones without needing a permit and expanding the range of businesses that can operate in mixed‑use zones;
- Expanding operating hours in industrial and other employment zones; and
- Establishing dedicated authorities to serve as a single point of contact for planning issues and streamlining investment in major proposals.
In addition, the productivity package will include making the $20,000 instant asset write-off for small businesses permanent, which should reduce unnecessary data requests from financial regulators and harmonise state retail tenancy rules.
The Budget plan is designed to save trade firms up to $1,600 in access fees by making Australian Standards – the technical rules for construction, occupational health and safety, and product safety – free.
The Government says it will also push to create agreements with the States to streamline commercial zoning and planning, and remove regulatory barriers to modern construction methods, which encompasses non-standard builds, including modular homes.
Regulation adds as much as $320,000 to the cost of a new house and $175,000 to the cost of a new unit, according to analysis from the Productivity Commission last year.
The Government estimates the package will cut regulatory costs by $10.2 billion each year, which will add around $13 billion to the economy annually.
