Optimism has been the theme of the LEADERS SUMMIT for the past two years and there were clearly positive emotions at the Retirement Living Council national conference in Brisbane last week.
And here is why: new retirement village development is back on the rise with $2.5 billion in new sales being pumped into the market this year and looking ahead.
For the first time we have two village surveys: The PwC / Property Council Retirement Village Census and, for the first time, the StewartBrown Retirement Living Performance Survey Report.
The Property Council Census is the initiative of the Retirement Living Council, which has a participation rate of 47% For Profit and 53% Not For Profit. Through its members, it delivers 93 operators, 1,070 villages and 98,000 units. The StewartBrown inaugural survey delivers 79 mainly Not For Profit operators, 455 villages and 31,000 residents.
All up, 172 operators and 1,525 retirement villages (with some minor crossover).
The RLC participants have 7,200 new village units being delivered over the next three years and the StewartBrown operators have 2,782 new units being delivered, a total of 9,982.
At an estimated $750,000 average price per unit nationally, this is $2.5 billion in new sales.
With a guesstimate 20% development margin, this is $2.0 billion in new funding/construction in the sector over 12 months (or $166 million a month).
In November 2022, an examination of villages.com.au’s new village listings revealed an average of 16 new retirement villages had been built each year for the past 10 years, with little brownfield development.
Given the move to vertical villages, at 100 homes per new village, this equates to 1,600 new village homes per year. Today it is 3,330 new home a year. A big jump – double in fact.
But maintaining the sector’s historical penetration rate - where 12% of Australians over 75 live in retirement villages – we need an additional 67,000 additional units by 2030, or 11,100 new homes a year.
We need them because villages are age supportive accommodation and services. With the lack of new aged care beds, full hospitals and a stretched home care workforce, the time is now for the sector to push harder for faster village approvals.
The customer needs them. The health system needs them. And the sector clearly has the ability to now deliver them.
