Next Big Thing: Unearthing Retirement Living’s Emerging Hotspots

As the first cohort of Gen X prepares to enter the retirement living market very soon, the eyes of the industry are turning to where the next generation will want to live. And according to experts at The Urban Developer ’s Retirement Living Summit in Brisbane this week, there are still areas of considerable undersupply, a fact that has started to attract residential and student accommodation developers to the sector. Location, location, location While everyone’s approach varies, the general consensus is that there is still opportunity in the seniors sector across the nation. The Village Retirement Group managing director Justin Harrison says its biggest problem is finding sites, but there is still potential in Brisbane. “We could build another 15 to 20 retirement villages quite easily in the suburbs of Brisbane, it’s very undersupplied,” Harrison says. Eureka Group chief executive Simon Owen says the ASX-listed company was an early mover in locations such as Bargara, Cairns and Hervey Bay. ▲ The Village Retirement Group’s Redcliffe site in Queensland offers pools, a lawn bowls rink and gym. “It’s really identifying those markets in Queensland where the population is moving,” Owen says. “The median house price in the Sunshine Coast, a traditional retirement haven, is now well over $1 million. “The median house price in sleepy old Hervey Bay is three-quarters of a million dollars. So, it’s trying to find the next Hervey Bay.” Eureka’s strategy is to focus on regional towns where there is employment growth, good transport connections and good social infrastructure, but also a strong housing market. ▲ Eureka New Horizons Villas at Hervey Bay. “We’ve bought a site in Gladstone and have a couple of sites under option in Tropical North Queensland … if I had a dollar of discretionary capital, it would be going into Queensland.” Urbis associate director Belinda Thomas agrees and says that already the strongest retirement living group is in Queensland, where it is a cultural norm. “No surprises there, 6.9 per cent of people over 65 are in this type of accommodation in Queensland,” she says. “It is expected that over 225,000 units are going to be available by 2029 Queensland and New South Wales are leading way with 30 per cent,” she says. Proportion of over-65s in retirement villages ▲ Source: Urbis Thomas highlighted key areas for supply in the sector, Queensland’s Wide Bay region generally making the list. “A significant surprise has been rapid growth of Port Macquarie in New South Wales, which is about five hours north of Sydney, offers a remarkable 46 per cent increase in regional supply between 2022 and 2025,” she says. “Victorian regional centres have also emerged recently with Geelong coming into play. [It has] that proximity to Melbourne, that coastal lifestyle and more affordable nature, and also Bendigo, because of its affordability and a cooler climate. “These hotspots reflect the diverse requirements of retirees,” she says. Challenges of expanding retirement As with all housing sectors, there’s rarely a “one-size-fits-all” model. Aura Holdings director Tim Russell, whose company has assets in such locations as Samford, Carindale, Hope Island and Maleny in Queensland, says that Aura’s strategy is a “pretty simple one”. “We want to produce product where there’s little or no competing supply,” he says. “We sell to 77-year-olds, and it’s a huge decision for them to move, because people generally buy and stay, particularly that generation. ▲ Aura’s Tim Russell, Reside’s Glen Brown, Jen Berryman of Chanje Partners and Urbis associate director Belinda Thomas with The Urban Developer’s Adam Di Marco. “Generally, [our customers don’t] want to jump on to a plane from Brisbane and move to Cairns, because that’ll be away from family, friends, the bridge club, the croquet club, the local church and the local doctor that they’ve been seeing forever. “There is a pent-up demand that doesn’t appear in a lot of data, because they want the ability to downsize in areas they want to stay in. “So the key is finding those sites, which might have residential and mixed-use developers as competition and think of unique ways to work with those sites, working with clubs or charities [for example].” Another issue is that some areas are not necessarily prepared or amenable for increased development. Pipeline of retirement and land lease communities ▲ Source: Urbis Port Macquarie was highlighted as a problem area despite its potential. The issue there lies close to home, Thomas says. “The council is the biggest problem because they have put a memorandum on planning proposals. So any type of uplift in zoning or height or floor-space ratio across the site, you can’t do it because the council has put a memorandum.” The new Housing Delivery Authority pathway could help to rectify these issues, but it’s still a gamble for developers in an already challenging space. The right product in the right place Reside Communities chief executive Glen Brown says that as sites have become more restricted, newer models such as vertical seniors projects are coming forward as part of adaption to meet location demand. “Our clients are generally older. Our clients stay in the community that they want to move,” Brown says. “They don’t have the aspiration generally to want to move 20, 30, 40 or 500km to a land-lease project. “I’m a very big fan of land lease, but our product really is tailored in that 10 to 25km catchment, and it’s become vertical now. ▲ A rendering of Akoya seniors living development at Greenwich. “There’s no real solution other than continuing to go vertical in areas where people have spent 30, 40, 50 years of their life,” he says. Berryman says that developers are becoming more astute in applying different models and typologies to different locations. “We’re seeing a lot of growth in the metropolitan areas in certainly vertical retirement villages [and they are] very much focused on that care solution. New entrants in particular are considering the private care solution in new metropolitan locations, she says. “There’s also growth, particularly in New South Wales, in what we sort of refer to as community apartment projects, where they’re over 55 or over 60s.” ▲ Eureka’s Simon Owen with O’Neill Architecture partner Justin O’Neill, One Fell Swoop’s Liam Carroll and Adam Di Marco. Akoya Greenwich or Central Element’s $250-million Lower North Shore project are examples, she says. And joint ventures with clubs are on the rise, due to their often “terrific” locations. But it’s also important to get site-specific amenities right, Thomas says. “For example, in Queensland, you’d obviously like to have a swimming pool as part of your amenities, whereas in Tasmania, not so much,” she says. One Fell Swoop national advisory director Liam Carroll says that themes of wellness, community, care and technology are becoming the standard operating environment. But other things, such as sustainability, will become increasingly important especially as Gen Xers enter the market. “[The previous response was] we’re into sustainability in our developments, as long as it saves me money and reduces my power bill. But we’re seeing that change. “Things like smart home automation are becoming fairly standard. “This industry has always responded well to shifts in behaviours, and villages now look nothing like those built 10 years ago. “We’re good at evolving and will continue to be so,” he says.

Next Big Thing: Unearthing Retirement Living’s Emerging Hotspots

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