While our retirement and aged care sectors are complex and tightly regulated, Australia needs more rental accommodation for retirees.
“There is so much demand out there for rental accommodation for seniors… and yet no-one is talking about it,” retirement author Richard Andrews said at The Urban Developer's Developing for an Ageing Australia summit on Friday.
“Penetration rates on retirement villages are sitting around 5 per cent, but the rental market for seniors is three times bigger. It’s 15 per cent, why don’t we talk about that?”
“It’s an area where we’re really missing great opportunities to be able to develop and meet that supply of demand,” Imagine Projects director Emma Plasier said at the Brisbane summit.
“Retirees are looking for a home, they’re looking for a lifestyle and they’re looking for the value proposition of the retirement village and the community, it’s not just about the bricks and mortar.”
The latest research shows demand for public housing from private renters aged 55-plus, is expected to climb 78 per cent, from roughly 200,000 households in 2016 to 440,000 households in 2031.
The AHURI research by Curtin University and RMIT University released last week, also shows that rising mortgage debt in later life is a growing social and economic issue, with mortgage debt among older Australians having increased by 600 per cent between 1987 and 2015, from $27,000 to over $185,000.
“We know it’s a significant problem,” Starts at 60 founder and publisher Rebecca Wilson said.
“We know 35 per cent of the population suffers low income in this category, and housing problems if you’ve never owned your own home, are huge.
“People aren't taking mortgages at this age. You can’t get credit anymore.”
A lack of understanding the consumer in this market is further compounded by Australia's growing ageing population, the over 85-year segment is forecast to grow more than 1.5 million people (3.7 per cent of the total population) by 2058.
Urbis researcher Kylie Newcombe says that penetration rates, meaning the proportion of residents over the age of 65 living in retirement villages, are highest in Queensland home to Australia's highest penetration rate of 6.7 per cent, followed by South Australia.
“New South Wales and Victoria show much lower penetration rates and there could be a number of factors for that... [but] the gap in the penetration for the southern states does represent opportunity for further growth,” Newcombe said.
“In terms of the tenure profile of residents who are actually living in these villages, the largest proportion, more than 50 per cent on average, are on loan lease or loan licence kind of arrangements
“But 15 per cent are rented, and we know that we have more renters as a proportion of the total population that’s growing.
“It’s really interesting to think about, how are we going to provide that rental product, and there’s going to be more pressure on retirement villages to provide that moving forward,” Newcombe said at The Urban Developer's Aged Care Summit.
Newcombe notes that product evolution is needed to meet a range of needs and the changing aspirations of the growing sector, such as integrated care, build-to-rent, and mixed use such as university based retirement communities, and co-living.
“Because we can’t keep delivering under the same model that we’ve been delivering,” Newcombe said.
“That’s the nut to crack, how do you get a commercial return out of it?” Andrews said.
“And I think there are some models there you can do it, like co-living, built-to-rent, they are going to be some really exciting spaces in this sector.
“And that's what's really exciting in terms of seniors housing— it’s around those new models.”
As the Royal Commission into Aged Care Quality and Safety hearings are scheduled to be held in Melbourne this month, the focus will be on young people living in residential aged care.
The commissioners are due to provide an interim report by the end of October, with the final report due by 30 April 2020.