In 1989, there were only 600 retirement villages in Australia. Most were owned and operated by the not for profit sector, including churches, building societies and friendly societies. Today the total number of villages is estimated to be over 2000.
By 1997, the numbers had grown to some 725 villages of which private sector operators ran some 45%. In 1995, the Hogan report recommended greater participation from the private sector and by the end of 2003, the sector was estimated to be worth some $12 billion.
The whole industry had changed dramatically. There were many developers both large and small who were participating in the sector and about 50% if the villages were private sector run. The look and feel of the retirement villages had also changed significantly, with more variety of accommodation types and greatly enhanced facilities such as pools, walking tracks and tennis courts. Whilst some of these improvements came because of competition, better regulation that set down rules for age-friendly building standards was also a driving factor.
Today, the retirement village industry is significantly larger. The total number of villages in Australia is estimated to be over 2000. Nationally, 184,000 people live in Retirement Villages. Just in Queensland, there are over 360 villages and around 39,000 people living in them according to a Property Council of Australia report published in October 2014.
The industry itself is still moving fast, with new developments, some consolidation and tremendous changes in the style and quality of accommodation being offered. According to the Property Council of Australia report, the estimates are that the number of residents in retirement villages will double by the year 2025, signalling expectations of significant new investments in the sector. Michael Eggington, Managing Director Retirement Living at Lend Lease that has 77 villages in its portfolio; puts the challenge into perspective saying, “By 2056, “The industry itself is still moving fast, with new developments, some consolidation and tremendous changes in the style and quality of accommodation being offered”
“Residents are seeking to immerse themselves and feel connected to the local community” approximately 1 in 4 Australians will be aged over 65 and will have differing requirements and preferences than the retirees of today. The current supply of retirement living product will not be able to meet the needs of future generations; therefore an increased investment into the retirement living industry is needed in order to meet this notable change in demand.”
Location preferences are also changing, according to Michael, “The urbanisation of retirees has already begun to highlight a potential shift in the choice of location and housing product. Residents are seeking to immerse themselves and feel connected to the local community which is why Lend Lease’s Retirement Villages are all located within close proximity to shopping centres and cultural hubs.”
The major operators are indeed investing across a number of centres. For instance, according to Dean Phelan, CEO of Churches of Christ in Queensland one of the largest not-for-profit operators, they are, “Committing a significant investment in the seniors and supported living space with major innovative development projects being proposed for Churches of Christ services on the Gold Coast, Western Corridor, Fraser Coast and South East Queensland.”
It is not only a matter of developing new facilities, however, because existing facilities have to be brought up to date as well. Dean goes on to explain, “Churches of Christ in Queensland has a vision for what the future of seniors and supported living services should look like and we are investing in ensuring our villages and services respond to the changing environment. We have identified that some of our retirement villages and residential aged care services have a number of limitations that restrict our ability to offer the highest standard of care and lifestyle facilities, so we are planning redevelopments at a number of our services.”
The driver for the change in what is offered in retirement living communities, whether they be retirement villages or manufactured home communities, is very much the changing expectations of the customer.
According to Manuel Lang, who is CEO of Palm Lake Resort that owns and operates 11 manufactured home estates and retirement villages in Queensland, with a total of around 3,000 home sites, “The future of retirement living will continue to be driven by consumer demand, and listening to the end-user about what is important to them to enjoy their resident surrounds”, he believes that “The future of retirement living rests in the delivery of master-planned communities, with a particular focus on high quality, extensive and comprehensive community facilities, services and activities. Co-located amenities such as medical suites, convenience stores, hairdressing and beauty salons are critical, as is easy to access care services.” Sustainability and well-being inclusions are also becoming more important to residents according to Michael.
“As an example, the Lend Lease Keperra Sanctuary Retirement Village has partnered with the Wildlife Conservation Partnership Program in order to protect and conserve the wildlife and habitat that is present within the Village and to highlight and encourage a more active and healthy lifestyle of its residents. Lend Lease is also in the process of rolling out a health and wellbeing program across its portfolio.”
Financing the new retirement lifestyle is also likely to change according to Manuel who says, “We also believe that the financial models of retirement living will change over time, as government policy around superannuation and the pension changes. As an industry, we must remain at the forefront of ensuring the financial arrangements our clients sign up to are supportable in the future. This must be finely balanced with ensuring that our clients have their need for quality residential living addressed.” The major operators in the retirement living space certainly seem to be ahead of the game in responding to increasing demand, more lifestyle demand in retirement and the changing financial landscape.