Retirement Village Development In Australia

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Retirement Village Development In
Australia (second set of slides)
John McNamara
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Penetration Rate of Over 65 Age Group

• Penetration rate in Australia approx 4 of over
  65 age group
• Greatest penetration rates are in states with new
  villages
• Larger villages with more communal service
  offerings attract a greater proportion of 65

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Penetration Rate of Over 65 Age Group
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Penetration Rate of over 65 Age Group
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Demographics

• Old age dependence ratio currently sits at 20
• By 2035 it will climb to 40
• Majority of prospective residents in the market
  will sell their home in order to purchase
• Post 2014 there will be less buyers and more
  sellers, however this may potentially alleviate
  land shortage
• It is likely that those residents intending to
  come into a Retirement Village may be still
  engage by the workforce part time

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Demographic Trend
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Price / Availability of Land

• Current prices of land in the market have placed
  significant pressure of return on cost
• Scale is required in order to ensure affordable
  delivery of accommodation and services (150 homes
  plus preferred). So 10 hectare parcels minimum
  size in general.
• In certain states, large land tracts on urban
  growth boundaries with rezoning/DA potential are
  becoming more and more scarce

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Obsolete Stock

• A lot of villages are now over 20-30 years old
• Of the 600 village owners 70 have only one
  village
• Access to capital to undertake refurbishment
  works is limited in general

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Property Fundamentals (source ABS, Macromonitor)

• Supply is not meeting demand

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Lifestyle Versus Care

• For profit sector generally branding Retirement
  as a lifestyle choice and wishing to ensure all
  required services in close proximity, including
  Aged Care (reinventing way people think about
  Retirement).
• Not for profit sector continuing to concentrate
  on continuum of care model integrated within the
  one development.
• Diversity of offering is healthy for the industry
  as choice should see increased penetration of
  ageing market into Retirement.

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