Last week, Aveo sold its 10,000 village units at a price of $385,000 each. How much is your village/s worth at that valuation?
This is a really important question.
Our guess is that your village units are valued at around $150,000 per contract; that is what Aveo contracts were worth in November 2019 when the group was sold to the Canadian private equity firm Brookfield.
If you are at $150,000, then your balance sheet has less than half the value that Aveo has achieved which has a big impact on what you can do in the future.
If you are a Not for Profit, you are far weaker if you want to build new villages, new assisted living or new aged care homes. Your future is far smaller.
Ditto for private operators that want to build new villages or new residential developments.
How did Aveo build the value of its village unit contracts? The answer is several things, but most important is that it invested in marketing and sales – aggressively – with the objective to sell every vacant home faster and at a significantly higher price than inflation.
They understood that demand does exceed supply, significantly. They understood that nationally village homes are priced at less than 60% of the local median house price.
They understood customers have the cash after selling and few options for downsizing into a secure, purpose-built home and community. Price is inelastic; people have a genuine need. You can charge more if you have pumped the demand.
So Aveo built this demand through rebranding, relaunching and very active promotion on vehicles like our villages.com.au.
And it worked.
Brookfield Real Estate CEO Lowell Baron said: “Working with the Aveo team we leveraged our operating expertise to significantly transform the business, improving the resident experience and creating vibrant communities, all of which have led to record sales and occupancy levels.”
Price increases are there to be had. In 2019, the ABS mean price of residential dwellings in Australia was $660,800. In March 2025, the ABS mean value is $1,002,500, an increase of 52%.
Over the same period, the Retirement Living Council PwC Census tells us that village prices have increased 42%. The average village home now sells for $651,000, which is $351,000 less than the median house value.
From this chart, you can see the largely private operators increased their prices by 16.5% last year. This value is being recognised by village owners. RetireAustralia is now back on the market seeking a higher price, according to The Australian newspaper today.
We think all operators should be this aggressive and more, because this will translate into your balance sheet and your ability to build more services for older Australians.
Which is a very good thing.
