The 2022 PwC/Property Council Retirement Census revealed that over the 18 months to December, the average cost of a two-bedroom retirement unit grew by 6.6% to $516,000, compared with a 26% lift for a similar property in the open market.
The report found retirement unit costs now sit at just over half (52%) the median cost of a private home in the same postcode.
In Sydney’s metropolitan region, retirement unit costs are 36% of the median cost of a similar residence in the same postcode.
Retirement Living Council Executive Director Daniel Gannon said retirement villages are an important part of the country’s housing mix, especially in this cost of living crisis.
“Retirement living communities offer a unique housing option that enhances wellbeing and lifespan for older Australians, and actually prevents the entry into aged care,” Mr Gannon said.
“At a time when national housing affordability is eroding, and health care costs are also growing, the value proposition of retirement communities is strengthening.”
Across the country, just 5% of older Aussies live in retirement villages with the average age of entry being 75 years and an average duration of eight to nine years.
However, widespread economic uncertainty, higher construction costs, and a complex state and federal regulatory environment has slowed the pipeline of new developments considerably.
The census found there were just 5,100 new dwellings in the three-year supply pipeline compared to 10,500 in the previous census.
Given the number of people older than 65 will increase from 4.4 to 6.6 million by 2041, Mr Gannon said the issue is clear.
“Given supply is forecast to slow and with legislative reviews that will affect the sector currently underway in five separate states - Victoria, Queensland, South Australia, Western Australia, and Tasmania - we urge caution to policymakers,” he 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.”
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