Demographer Simon Kuestenmacher believes retirement villages are doing “God’s work” in delaying the entry of older Australians into aged care.
Mr Kuestenmacher set the scene for more than 700 people with the opening keynote at the June 2024 National Retirement Living Summit, taking a deep dive into the country’s demographic outlook.
“Retirement communities will be the fastest growing property segment in Australia for the coming 10+ years,” he said.
“Retirement living caters mostly to 75- to 84-year-olds, with such a narrow age band making demand forecasting an easy task.
“The big challenge for operators is to understand the demands of their new Baby Boomer residents and finding staff.
Mr Kuestenmacher emphasised the need for systemic reform to Australia’s aged care system.
“We have this big, fat birth cohort of Baby Boomers moving into aged care facilities,” he said.
“The sheer order of magnitude of the Baby Boomer generation guarantees that they will completely reshape this stage of the life cycle.
“They have reshaped every stage of the life cycle, and they will do exactly the same with the retirement living industry.
“In the next 14 years, we are going to double the number of Australians over the age of 85 from 586,000 people today to almost 1.2 million people.
“This will double the amount of care that needs to be given in this country and there’s no scenario in which we will come even remotely close to being able to do this if we continue operating under the current system of providing aged care. We need systemic reform.”
Mr Kuestenmacher outlined how retirement villages can play a significant role.
“We need to minimise in a systemic way the need for aged care,” he said. “Retirement living comes into the mix here because we know that if you live in retirement village, it is proven to minimise the the need for care, while prolonging the need for entry into aged care, meaning the retirement sector is doing God’s work here.
“It’s really the only chance that we have – deep systemic change.”
Retirement Living Council Executive Director Daniel Gannon echoed Mr Kuestenmacher’s thoughts and encouraged the Australian Government to “get their skates on”.
“Australia’s aged care system is crumbling under the weight of increasing demand, propelled by an ageing population,” he said.
“Unfortunately, this year’s federal budget didn’t lay out a long-term plan for Australia’s care challenges, which is plunging the country into a deeper care deficit.
“The reality is that Australians aren’t getting any younger, and every day that passes without a plan to appropriately and affordably house and care for older Australians is a missed opportunity.
“This sentiment underpinned the RLC’s development of the ‘Shared Care’ framework – a model that would deliver more care per dollar invested in a retirement village setting.”
Aveo CEO and RLC President Tony Randello reflected on why it isn’t possible to talk about the future of aged care without considering the value proposition of retirement villages.
“Our sector is already providing community-based care for residents at all stages of their care journey,” he said.
“However, we can and want to do more to ensure that older Australians are living independently for as long as possible by consolidating their home-based care to return a better service to them as consumers and reduced costs for government.”
Mr Kuestenmacher also highlighted skills shortages across the country and what he describes as the workforce “retirement cliff”.
“The skills shortage is baked into the demographic pie, and it won’t get better in the coming decade,” he said.
“Since we are doubling the 85+ population in the next 14 years from 586,000 to 1,189,000, we can be sure that the need for aged care workers will grow at roughly the same rate. Considering the sector is already dramatically understaffed, that’s a problem.
“There’s also another element that makes things a bit more difficult and that’s what I call the retirement cliff.
“It’s a simple measure that shows what share of the workforce is already of retirement age and what share is aged between 55 and 64, meaning they will fall off the retirement cliff in about a decade.
“There’s a shortage of workers across so many professions that it will continue to drive up the costs of operations.”
The RLC last year released Better Housing for Better Health, a report that outlines the industry’s contribution to housing, healthcare and the 250,000 people who live in age-friendly communities across Australia.
This ‘first-of-its-kind’ report, which sends a strong message to governments about the value of the sector, the affordability it provides in an otherwise unaffordable housing market and why its residents live healthier lives, can be accessed here.