[+] Affordable Focus Leaves Retirement Out in the Cold

The focus on affordable housing is overlooking the value of retirement living. This was the message at The Urban Developer ’s Retirement Living Summit (June 6), despite the retirement sector’s potential to free up housing as well as adding to the wider residential pool. Director of Queensland community developer Aura Holdings Tim Russell said that ‘rightsizing’ into specialist retirement living could free up more homes. “[About] 1.5 people move into one of our retirement village apartments,” Russell says. ▲ LDK Seniors Living CEO Byron Cannon, with Australian Unity Retirement Community GM Ruth Zammit and Aura Holdings' Tim Russell at last week ’ s summit. “We track the number of people [who] move into the house that they ’ ve sold and 2.9 people are moving in. So you ’ ve almost got a 1½ person uplift through delivering a retirement apartment. “The trickle-down effect of that is massive. You apply that to a large population, we don ’ t have a housing crisis anymore. “There ’ s a real opportunity for the sector to be part of that broader solution, and we ’ ve got to do it a lot better.” Affordable versus retirement Real estate partner at advisory firm KordaMentha Tony Massaro says that with increases in people living healthier and longer lives over the age of 75 years, we’re presented with a specific housing challenge. “We are not putting enough supply on for the current level of people who are 75, it ’ s good for us as developers, but not for those turning over 75—we’re not producing enough stock if we’re keeping penetration rates the same.” ▲ Aura Holdings has developed luxury communities, including Somerset Indooroopilly in Brisbane, [pictured above, and main image]. Given that by 2036, it is predicted that 21 per cent of the population will be aged over 65 years, it’s a huge market and a huge opportunity as this will only increase, and probably far beyond growth estimates. But it is not one that is recognised by governments, says Urbis director of planning Michael Cattoni. “Affordable and social has, quite rightly, received much support given that the only projects that seem to stack up in many areas of Australia are [high end],” Cattoni says. “[And we’ve] seen significant funding from different levels of government into affordable and social housing,” he says. “But retirement has been left out of that conversation.” The Federal Budget last year allocated $2 billion to social and affordable housing and this year announced a $9.3-billion social housing agreement to build and repair social housing . But the Budgets were largely silent on retirement. “Retirement living units are often cheaper than other typologies, why can ’ t governments look at incentivising similar funding grants to retirement living? “Not only is it delivering age-appropriate housing, but in doing that and increasing supply it creates an opportunity for those people struggling to maintain a five-bedroom Queenslander to free it up for other groups of the community,” Cattoni says. Growth areas Despite the lack of governement support, there are some major trends in retirement living that are posing an opportunity for developers. “Land-lease communities have seen a real boom,” says Michael Cattoni. “[This is due to] a multitude of things, including the perception that that type of housing is less regulated and therefore a more attractive model.” ▲ Avid Property has launched an over-55s land lease project at Hervey Bay. This is in contrast to aged care and retirement generally, where in almost all states in Australia, save NSW, legislation is being delivered to tighten up regulations around retirement living. Consequently, developers are looking into different models, both pricing structures and typologies. “Vertical villages are here to stay,” Massaro says. “Almost 70 per cent of new villages have this component in them, we don’t want to go into those [outer] districts because the infrastructure isn ’ t going to be there.” Ventures which are attached to clubs—be they bowls, golf or other sporting ventures—are also a strong option. “They provide an important recreation function within communities, [and the clubs] are struggling to keep lights on through memberships—there are plenty of examples where they have had to close their doors,” Cattoni says. “Councils seem more open to these opportunities given pressures around housing generally. And golf clubs have huge landholdings. The passive revenue [of retirement communities] allows them to keep the function in the community.” ▲ ACT ’ s Federal Golf Club, which is being redeveloped into retirement living by Mbark, spends $2 million a year maintaining its green space. But that’s not to say there aren’t headwinds. “Competition for sites is a challenge, which seems to be made even more challenging recently given the amount of investment into social and affordable housing,” Cattoni says. “There are groups that are now becoming more active and are cashed up, so they can go find those sites which would otherwise end up on the market and snapped up by retirement operators.” But the shift in planning authority perspectives can make all the difference, Cattoni says. “Brisbane has some of the most progressive policies nationally. “Brisbane City Council saw this issue [of lack of retirement supply] coming some time ago with operators struggling to compete with build-to-sell, and they deliberately changed retirement for church-zoned land about the city.” Continuum of care With the number of Australians aged over 75 years set to increase from 2 million to 3.4 million by 2040, the need for a mix of aged-care within retirement is also increasing. According to the Retirement Living Council, retirement villages could help make the delivery of home care almost 20 per cent more efficient. In a state-specific study, it also found that after nine months of living in a retirement community, South Australians were 20 per cent less likely to require hospitalisation. ▲ Australian Unity is investing in vertical retirement at its $100-million Auchenflower site. “Many operators are continuing to expand their services to provide a continuum of care,” Massaro says. “We’re seeing it come into Australia and there is definitely a need for continuum of care in retirement villages, but you do need to ask, does it make sense to do villages here? You have to have a deep enough pool of potential residents. “[But] moving can be stressful, so if you have that continuum of care in place, operators can tap into that market.” Director of Chanje Partners Stacey Baker said that this was a major concern for residents themselves. “As we all know seniors don ’ t see themselves moving into aged care and are looking for solutions to ensure this doesn ’ t happen,” she says. “But there is no one-size-fits-all [and costs] are driving a lot of developers to the higher end, and legislation can sincerely affect our businesses.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

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Clare Burnett
Sun 09 Jun 24

[+] Affordable Focus Leaves Retirement Out in the Cold

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[+] Affordable Focus Leaves Retirement Out in the Cold

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