Addressing Retirement Living Affordability Amidst Australia's Housing Crisis
August 30, 2023
Amidst a nationwide housing affordability crisis, retirement villages emerge as a beacon of affordability for older Australians, according to the latest 2022 PwC/Property Council Retirement Census. The data underscores a widening affordability gap between retirement units and traditional real estate, highlighting the pivotal role of retirement villages in offering accessible housing options.
Released recently, the census reveals a notable surge in the average cost of two-bedroom Independent Living Units (ILUs) within retirement villages, reaching $516,000—a 6.6 percent increase over 18 months. In stark contrast, national house prices skyrocketed by 26 percent to $831,900 during the same period.
Daniel Gannon, Executive Director of the Retirement Living Council, emphasizes the significance of retirement villages in mitigating cost-of-living pressures for older Australians with fixed incomes. "Units in retirement communities are, on average, 48 percent cheaper than the median house price in the same suburb," notes Gannon, stressing the affordability advantage offered by retirement living options.
However, the census also raises concerns regarding the declining development supply pipeline for retirement units. Projections indicate a drastic reduction to 5,100 dwellings over the next three years, down from the previous forecast of 10,500 dwellings—a worrying trend amidst increasing demand.
Despite the challenges, national retirement village occupancy remains steady at nearly 90 percent, indicating near-full capacity utilization. Gannon highlights the urgent need for policymakers to address barriers hindering the expansion of retirement living options. With the aging population projected to surge from 4.4 to 6.6 million by 2041, strategic interventions are imperative to capitalize on the opportunities presented by retirement living while mitigating associated risks.
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