RETIREMENT villages are still an affordable housing option for older Australians, but regulators should exercise caution on making changes to village 'buyback' laws.
That's according to the Property Council of Australia - which represents developers and retirement villages through its Retirement Living Council division- which has today released the results of its annual survey of the country's retirement living sector.
The Property Council is warning that mandatory retirement buyback rules for retirement village operators in NSW could put a freeze on the supply of housing for older Australians.
NSW has proposed reforms to change exit entitlements in retirement villages which would require operators to buy back units within six months of an owner moving out if the unit is based in a metro area and has not sold. This would be extended to 12 months in regional areas.
The changes have been mooted to protect vulnerable older residents who needed the money quickly to move into another village or transition into aged care.
The 2019 PwC/Property Council Retirement Census found the $459,000 average cost of a two-bedroom independent living unit in a retirement village remains at 64 per cent of the cost of the equivalent median house price in the same suburb.
It also found it now takes an average of 258 days to sell an existing retirement living unit, which includes periods for reinstatement or refurbishment, marketing and settlement.
Retirement Living Council executive director, Ben Myers, said the census stats on average selling periods should be noted by governments and lawmakers looking to tighten regulation.
"Independent retirement living is a critical part of the seniors housing mix; it enables senior Australians to remain independent for longer, which keeps them out of aged care, with access to support services and a network of friends within a village community," Mr Myers said.
"A currently proposed reform in NSW would mandate a retirement village operator buy back all units from departing residents in metropolitan areas after six months, more than two months inside the current average selling period.
"This regulation, if introduced, will put severe pressure on retirement village operators and have an adverse impact on older people seeking housing and services solutions.
"It will result in very few operators being willing to invest in more retirement housing for the rapidly ageing NSW population, and put further pressure on an aged care system that's already under significant strain," Mr Myers said.
Seventy-one per cent of all villages currently offer a guaranteed buyback to a departing resident, which has grown from 65 per cent last year.
The survey also found that almost half (48 per cent) of new villages currently under development contain a vertical component, reflecting an increasing desire of retirees for apartment and higher density living in established areas.
Other Census findings
- The average age of entry to a village has declined slightly to 74 years of age, while the average age of current residents is 81.
- There's been an increase in occupancy by single residents (68 per cent), who are predominantly female (63 per cent);
- Village occupancy around Australia remains at 89 per cent, which is well down on 2017 figures;
- 29 per cent of all villages are now located with care on site or in close proximity (up from 27 per cent last year).
More information can be found at www.propertycouncil.com.au
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