A major developer has launched a new concept in retirement living designed to increase the appeal of villages purpose-built for ageing Australian
Stockland has begun construction on two new developments for over-55s, in Sydney and Perth, featuring two and three-bedroom, low-maintenance homes to be sold under community title.
Called Aspire, residents would be required to pay all costs upfront and in return, retain all capital gains and complete ownership of their home and land.
A monthly levy would apply to maintain community facilities but owners would be free to sell the property as desired, with no exit or deferred management fee.
Stockland retirement living chief executive Stephen Bull, said the concept came out of research finding that only 5 per cent of Australians aged over 65 live in a retirement village.
“We thought, ‘How do we broaden that reach, what are some of the things we can do to attract more retirees to live in a village-type environment?’ given we know that when they do, they tend to love it,” Mr Bull said.
“We thought one of the barriers may be just the financial structure of a retirement village whereby a resident of a traditional village moves in, they take a lifetime lease over the premises but the operator retains ownership.”
He said doing away with exit fees was expected to be appealing to some following negative publicity about the traditional retirement village model last year.
“I don’t think there’s a distrust (surrounding exit fees); more of a misunderstanding about ‘why would you charge someone money when they leave the village’? ” Mr Bull said.
“The thing is the exit fee is charged because the cost of buying into a village is about 65 to 70 per cent of the median house price of the local area. Customers who understand that are quite comfortable with it.”
The price of a two-bedroom, two-bathroom, one car-park home in the Aspire Sydney village in Marsden Park, would start at $655,000.
People of any age could buy a house, but only those aged 55 and over could live there.
Mr Bull said Stockland was keen to roll out the concept in other states, but first had to overcome some legislative hurdles. “Because this product doesn’t fall under the Retirement Living Act, we need to get planning support,” he said.
“There’s been some examples in Queensland where this type of product is now allowed for discrimination purposes.
“We’re trying to work through that at the moment because (Queensland) is certainly a market where we’d have opportunities to deliver it.”
Even without any growth in the proportion of people living in retirement villages, Australia would need another 100,000 individual homes in the next 20-years.
“That represents on average 5000 new homes a year, just to maintain that 5 per cent penetration rate,” Mr Bull said.
“The market’s not delivering that at the moment, there’s an undersupply of new product and retirees today have very different expectations of those from 10 or 20 years ago.”
He said modern retirees wanted more open plan living, and to maintain their independence.
Gerard Brody from the Consumer Law Action Group, said he’d like to see one of the contracts to see how it was structured but the general idea was encouraging.
“This model does appear to be more like a traditional land sale rather than a contractual licence of the lease/loan arrangement of most retirement villages,” Mr Brody said.
“Also the absence of deferred management fees is positive.”