COVID-19 has provided a massive boost to the retirement living sector as older Australians recognise they are not as secure as they thought living in an at times isolated family home.
Breaking a 50-year pricing position where retirement villages have always been priced at 80% of the local equivalent housing, operators are now asking – and receiving – higher prices than the local equivalent.
In this issue of The SOURCE we point to Tim Russell and Mark Taylor’s Aura Holdings in Brisbane selling at $690,000 to $1.425M while the local median range is $410,000 for a two-bed apartment to $1.38M for a four-bed house.
Wesley Mission is selling new two-bed apartments for $620,000 while a three-bed median priced apartment in the same suburb of Sinnamon Park is $546,000.
Each of these examples features a DMF fee structure, meaning the cost of the accommodation is even higher over the time of occupancy.
Meanwhile land lease communities are enjoying the same new selling market. Their offer is that homes are lower priced as you don’t buy the land and house – you just buy the house.
Yet, in this issue, we feature GemLife selling three-bed homes for $640,000 versus the local median in Pimpama at $530,000, and Hometown selling two-bed homes for $595,000 while $625,000 is the median for local two-bed homes in Port Macquarie.
And construction can’t keep pace with demand in each project.
One can say that older Australians have made a killing out of increasing home values – but this doesn’t hold when you are paying the same or higher than the local market rates, unless you are moving to a lower-priced area.
And this is plausible as local council regulations make building a new village almost impossible, so buyers have little choice but to relocate outside their traditional area if they want to live in a village.
Whatever the reasons, demand does exceed supply and the smarter operators are at long last taking advantage and escalating prices, which benefits existing residents as profitable operators have financial flexibility to deliver more facilities and services.