Monday 29 May 2023
MEDIA RELEASE
SA retirement reforms must strike resident-operator balance
The Retirement Living Council together with the Property Council have lodged a joint submission on the South Australian Retirement Villages Amendment Bill 2023, in an effort to strike a balance between resident-focused reforms and operator viability.
The nation’s retirement industry provides a user-pays, rather than taxpayer funded, purpose-built solution to two complex challenges facing Governments around Australia – namely housing affordability and supply, and an ageing population.
South Australia’s retirement living sector contributes almost $1.5 billion towards GDP and delivers $332 million worth of important health outcomes and savings for State and Federal Governments.
Retirement Living Council Executive Director Daniel Gannon said industry’s submission seeks to strike a balance for all stakeholders, including residents, operators, and government.
“Industry is motivated by a desire to increase consumer and investor confidence, raise industry standards, and pursue better regulation and transparency while delivering diverse housing options for seniors,” said Mr Gannon.
“For these reasons, we are proposing greater contractual clarity for prospective residents to ensure consumers understand the tenure model they are entering, the fees they are agreeing to pay, and their ongoing rights and obligations.
“At a time when South Australia is addressing and grappling with housing supply constraints, we need legislation that balances resident and operator considerations to ensure industry continues to provide meaningful housing solutions.
“A viable retirement living industry in South Australia advances the State Government’s capacity to pursue an ambitious ageing, health, and wellbeing agenda by improving wellness outcomes for seniors and providing efficiencies that can be reinvested in services and infrastructure.”
Mr Gannon said the PCRLC submission proposes important resident-focused improvements, including:
- Plain language pre-commitment checklists in contracts to improve clarity for prospective residents about the nature of tenure.
- Worked estimates of exit entitlements within disclosure statements over two, five and 10-year horizons.
- A more consumer centric exit entitlement model that concurrently balances ongoing operator viability.
- Improved dispute resolution processes for resident-to-resident conflict, while increasing professional standards of village staff.
Mr Gannon emphasised the delicate nature of the timing of the review for industry and the significant impact legislative changes could have.
“This review comes at a precarious time given South Australia – like the rest of the nation – is facing challenges around housing supply, affordability, cost and supply chain constraints,” he said.
“If these reforms make it harder for operators to build and operate age-friendly communities, it could place a handbrake on supply at the worst possible time.”
The below data relates to the retirement living industry and is sourced from the latest PwC Retirement Census.
Consumers
- There are currently 4.4 million Australians aged 65 years or older – by 2041, this number will balloon out to 6.6 million, and by 2066 will hit 9 million.
- Average age of current residents in SA is 81.6 years (national average, 80.7)
- Average age of residents entering villages in SA is 74.9 (national average, 75.3)
- On average, 1.29 residents per independent living unit (ILU) in South Australia
- Average tenure of SA residents is 10.8 years in an ILU (national average, 8.7)
Industry and development profile
- Average age of villages is 31 years across South Australia, above the national average of 26.
- 88% of all South Australian villages are full.
- Average two-bedroom ILU is 31% cheaper than the median house price in the same postcode (compared to national average of 45%).
- It takes on average 236 days to sell an ILU in South Australia.
ENDS
Media contact: Joe Schwab | 0402 687 890 | [email protected]