New research has found retirement villages are a popular way to live for some older Australians, but the model could be improved to reduce confusion and disputes.
The findings from the Australian Housing and Urban Research Institute research has revealed retirement villages are projected to house 7.5 per cent of people over age 65 by 2025.
Villages save the health care system $2.16 billion, with $1.98 billion of those savings achieved by postponing residents' entry into government funded aged care facilities.
The research, Business models, consumer experiences and regulation of retirement villages undertaken for the institute by researchers from University of Tasmania, UNSW and Synergy Consulting explores the business models used by retirement villages, and surveys residents to understand the appeal, benefits and disadvantages of living in retirement village accommodation.
Lead author Max Travers, of the University of Tasmania, said retirement villages are popular and growing among affluent Australians.
"We found that most retirement village residents come from financially well-off groups who have used the proceeds of their property to live in a village," Dr Travers said.
"The major providers in the retirement village industry are for profit companies who market their product as a 'lifestyle choice' to entice affluent Australians to purchase accommodation."
The research finds people choose to live in a retirement village for a number of reasons: declining health (the most cited reason); the need to reduce responsibility and maintenance; the need for assistance while not being a burden on families; social isolation and loneliness; and a desire to take control over their future.
People are attracted to retirement villages where they are near to family and friends; have a clientele of similar age; are in a familiar place; are close to services and facilities; that provide safety, security and informal care; have lifestyle options; and are affordable.
"Overall, the research found residents have a positive view of the perceived and actual benefits. Villages are growing as a housing and lifestyle choice because they offer community living," Dr Travers said.
Financial arrangements such as flexible entry fees were important for giving diverse populations of older adults the ability to live in a retirement village.
Some residents revealed that living in the general community was more expensive - and more challenging - than the costs of living in a retirement village and felt that the range of services and facilities provided in the retirement village increased their dwelling's affordability.
However, many participants said the real cost was in the exit fees levied when a resident leaves the village. They said it was important to see their retirement village home as an investment in a lifestyle, not as a profit-making investment.
A quarter of respondents either could not understand exit fees or experienced difficulties understanding exit fees. Most residents sought legal advice but did not see this as helpful.
Two-thirds said that they had encountered disputes with their retirement village operator; around one-fifth of those disputes concerned fees or the financial management of their village.
The next most common issue encountered concerned their retirement village's management and service quality.
The report recommends that there are opportunities to enhance the retirement village model through:
- Establishment of a national ombudsman to support and advocate for the rights of older people navigating disputes with retirement village operators
- Greater transparency into ongoing charges for retirement village residents . better standards of service including turnaround times for repairs and maintenance . building standards that ensure retirement village operators are responsible for providing accessible, universally designed residences and facilities
- Provision of ethical and impartial dispute resolution processes for retirement village residents
- Regulation of the financial management practices of retirement village operators;
- Repositioning of retirement village contracts as a financial product, instead of a housing investment product;
- Ensuring greater consumer education and protection.
Therese Murray
Wordsmith. Senior journalist. Editor. I have a proven track record in helping people and communities solve their problems. My career is all about telling stories.
Wordsmith. Senior journalist. Editor. I have a proven track record in helping people and communities solve their problems. My career is all about telling stories.
