The facts on retirement living
This week’s media coverage of retirement villages in Australia overlooks the proven facts that most residents are happier and can live independently for longer, under a financial model that suits their needs.
“More than 184,000 senior Australians call a retirement village home, and the overwhelming majority are happier than they were before they made the move,” said Ben Myers, Executive Director – Retirement Living at the Property Council of Australia.
“The most recent comprehensive survey of more than 5000 of these residents in 2013 found more than 90 per cent reported their social life has improved or stayed the same, and 90 per cent believed their move had been a good financial decision.
“Of recent purchasers of retirement village villas or apartments, 83 per cent regard their fees as reasonable and 70 per cent said their cost of living was the same or less than their previous family home.
“If they had their time over to make the same choice to move, 98 per cent said they would – an overwhelming majority who are not represented in this weekend’s Fairfax and ABC coverage.
“Other independent research by Grant Thornton finds that village residents live independently for five years longer than the national average, delaying their entry into the residential aged care system due to the supported environment they live within.
“Village accommodation prices have typically been less than median house price increases, with the average entry price across the country still below $400,000. Despite the perception that retirement village operators are profiting at the expense of senior Australians, many operators record lower returns than many other property businesses.
“The deferred management fee (DMF) model used by most retirement village operators enables residents – of which the vast majority access an age pension – to effectively part-pay for their villa or apartment at the end of their tenure when their place is resold, making villages more accessible and affordable.
“The DMF model is unique and not always easy to understand, especially by the immediate families of the resident. It’s one of the reasons our industry has taken proactive steps to simplify resident contracts to make them easier to understand. We encourage all operators to use and read our National Guide to Creating Simple and Effective Retirement Living Contracts, created in 2016.
“The industry also encourages all people thinking of moving to a retirement village to seek independent legal and financial advice to make sure the decision is not only right for their lifestyle, but meets their financial needs.
“With an ageing population and an increase in care being delivered within the home, our research indicates there will continue to be strong demand from senior Australians to live in retirement villages.
“In fact, without further villages being developed, many senior Australians will struggle to find ‘age-friendly’ designed houses with the nearby access to services they need to continue to live happily and independently, which would be a devastating outcome,” Mr Myers said.