More haste, less speed required for retirement village policy
Today’s announcement by Minister for Better Regulation Matt Kean that further changes will be made to the laws governing the retirement village sector need further consultation to ensure they do not put future supply of this critical form of housing at risk.
The Minister’s plan to:
- restrict the time period in which a resident is required to pay fees on their property while it is being sold, and
- require a retirement village operator to sell or buy back a unit within six months of a person leaving a retirement village in metropolitan areas and 12 months in regional NSW
sounds reasonable at face value but potential unintended consequences must be further considered.
Property Council NSW Executive Director Jane Fitzgerald said today that the Property Council supports a strong, fair and equitable retirement village sector and had led the way with its 8-point reform plan released in 2017.
“To ensure residents have confidence in the sector and that village operators are able to deliver a quality experience and safeguard future investment, it is critical that policy is fair, effective and evidence-based,” Ms Fitzgerald said.
“The retirement living industry takes its role very seriously in providing purpose-built housing for the rapidly growing seniors market. Residents gain real health and lifestyle benefits from moving to a retirement village and this reduces the cost and burden on the health sector.
“The industry again stands ready to work with the next NSW government to ensure residents needs are met and that a viable and thriving sector exists. That is why more consultation with industry is needed on the initiatives announced today.
“There are challenges that need to be addressed in the policy detail and it is in everyone’s interest that we avoid the pitfalls that policies such as buybacks have created in other jurisdictions.
Ms Fitzgerald said we must get the policy right to get a good outcome. Extensive consultation with a range of stakeholders would now be needed – residents, large and small operators and those in the for profit and not for profit sectors.
“Working closely with industry will help ensure we all get an even better retirement living sector. We would ask Minister Kean to adopt more haste and less speed and consult further with a diversity of stakeholders,” Ms Fitzgerald said.
“The mandatory buyback policy has the real potential to decrease the value of individual properties within retirement villages and adversely impact re-sale prices. This would hurt residents and operators.
“Smaller operators, in particular, will find it challenging to source capital to buy back units when required and cover the significant liability that will be placed on the balance sheet. This in turn risks investment in an industry critical to meeting demand from our ageing population.”
The Retirement Village Industry has been proactive in contributing to key reforms to the industry. The Industry’s 8-point plan released in 2017 outlined the need to implement mandatory accreditation for retirement village operators, clearer contracts and better dispute resolution mechanisms.
The industry also launched an industry code of conduct to promote and protect the independence, privacy, dignity, happiness, safety and security of retirement village residents.
Media: William Power – 0429 210 982