Retirement Village Development In Australia (second set of slides) John McNamara
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+
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
Demographic Trend Person 22 to 65 Potential Workforce Person <21 years (largely non-workforce)
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
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
Property Fundamentals (source: ABS, Macromonitor) • Supply is not meeting demand
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.