Older Australians looking to downsize or purchase a property to spend their golden years in can take advantage of the affordability of retirement units relative to traditional homes.
Over the 18 months to December 2022, the average cost of a two-bedroom Independent Living Unit (ULI) in a retirement village increased by 6.6% to $516,000 while national house prices over the same period grew 26% to $831,900, according to the recently released Retirement Census by the Property Council and PwC.
Overall, units in retirement villages cost 48% cheaper compared to the median house prices in the same suburb.
Despite being relatively cheaper than traditional real estate, retirement housing is actually suffering the same struggles when it comes to supply.
In fact, the Census found that the three-year development supply pipeline of retirement units fell by more than half to 5,100 dwellings compared to the previous forecast of 10,500 dwellings.
Meanwhile, the national retirement village occupancy remained steady at almost 90%, which represents almost full capacity.
Retirement Living Council of Australia executive director Daniel Gannon said the results of the Census indicate how crucial retirement villages in providing affordable housing options for older Australians, who often had to get by with their fixed incomes amid the rising cost-of-living pressures.
“At a time when national housing affordability is eroding, and health care costs are also growing, the value proposition of retirement communities is strengthening – but there are some warning bells starting to sound,” he said.
For Mr Gannon, the higher construction and debt costs together with general economic uncertainty are also affecting the supply of retirement housing.
This is an important discussion to have, given that based on estimates, the number of Aussies older than 65 will increase from 4.4 million to 6.6 million by 2041.
“Australia’s population is ageing, which means our three tiers of government need to address and solve the challenges associated with housing this demographic cohort now,” Mr Gannon said.
“If governments make it harder for operators to build and operate retirement communities, the supply clamp will tighten even further – on a sector that we know offers an affordable and bespoke offering for older Australians, who simply can’t keep up with the traditional market which is becoming increasingly unaffordable to rent or buy into.”
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.08% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 STAR CUSTOMER RATINGS |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% |
| Disclosure | |||||||||||
6.14% p.a. | 6.16% p.a. | $3,043 | Principal & Interest | Variable | $0 | $350 | 60% |
-
Photo from @gettysignature at Canva.
Collections: Mortgage News Reverse Mortgage Buying a home
Share