Current shortcomings of the existing retirement living products will drive change.
It is generally accepted that change within the three key areas of legislation, care support and accommodation renewal is essential. The changes should include the revision or replacement of current legislation, increased care support within retirement living complexes and the renewal or redevelopment of existing retirement living complexes.
Revision or replacement of current legislation
The existing legislation is outdated and has numerous shortcomings and future residents and homeowners will put increasing pressure on the updating to both Acts, the MH(RP)A and the RVA. The anomalies and occupier risks, mentioned above, will be among the elements of the two Acts that will require change in the future. Surely the requirement for Over 50s villages to have “movable” homes is illogical and so is the minefield of disparity in entry and exit fees for retirement villages.
At present there is imbalance between the representative bodies for operators and occupiers in residential parks and retirement villages. Historically the Property Council of Australia has effectively represented the interests of the scheme operators and park owners but there is no single, representative institution representing homeowners and retirement village residents. Many scheme operators subscribe to the Retirement Village Code of Ethics that is an initiative of the Property Council of Australia and Leading Age Services Australia.
The legislators should balance the interests of both owners and occupiers of retirement living complexes and this means considering synergy of rights and regulations between both Queensland Acts. Hopefully, in the near future, an effective body representing all occupiers within retirement living complexes will be formed and act as an advocate for homeowners and residents. This would allow greater participation of occupiers in the legislative updating process.
Increased care support within retirement living complexes
All retirement living complexes should promote care services for this ageing cohort and provide a high level of support for the elderly and infirm. In the past aged care has been the prerogative of the residential aged care facilities (RACF). However, the inability of the existing RACFs to handle the growing number of elderly people requiring care has resulted in park owners/scheme operators considering the changes that can be initiated to keep homeowners/residents within their units while receiving a high level of care. Currently many retirement village operators are expanding the type of care and services into retirement village units, referred to as “assisted” units. It is probable that the residential parks will also consider adding care assisted support services within residential parks.
Renewal or redevelopment of existing retirement living complexes
Many scheme operators and park owners have complexes that are aging, in the region of 20 to 40 years old and, in the past, there has not been a concerted effort by the industry to radically upgrade these complexes. Industry investors have been slow to appreciate that retirement living complexes have long-term capital growth risk because of long-term occupancy rights of persons whose ability to pay is reducing. Old, outdated complexes are difficult to upgrade because of high renovation costs and ongoing rights of aging residents. In order to retain viable complexes, it is essential that management implement an ongoing rejuvenation process through capital replacement works.
In future, management will proactively address the physical deterioration of their complexes, possibly by planned and staged rebuilding and more intensive use. This will require an innovative approach and should, where possible, involve the homeowners/residents whose rights should be integrated into this process. Renewal and redevelopment will require substantial capital replacement funds and strategic planning should ensure that a high percentage of funds received from resales and exit fees for retirement villages should be retained for this purpose. Hopefully, residential parks will consider how to implement capital replacement funds or similar reserves.
It is in everyone’s interest that seniors can live independently as long as they are able and the key role of seniors’ living complexes is to assist seniors in having a lifestyle that promotes both physical and mental wellbeing. There are three ways that seniors can be assisted in selecting and enjoying the right lifestyle for them, namely: (1) being well informed on the seniors’ living options, in particular the legal and financial responsibilities and benefits of each option, (2) monitoring of the effectiveness of the governing legislation and support systems that foster the development of caring communities for the elderly, and (3) effective management of the complexes that is genuinely in partnership with the homeowners/residents and is able to balance the needs of the occupiers with the need to produce a financial return for the operators.
To achieve these goals, it is essential that consideration is given to the financial support given by government to these seniors and the legislation governing their future living standards. Clearly any financial support that government can give in assuring the financial viability of these important seniors’ living complexes would be appreciated by both operators and residents. It should not be forgotten that, demographically, the seniors’ cohort is becoming a larger proportion of the population – and this group needs suitable independent but assisted, accommodation.
Learn more about retirement living options in Queensland:
- Bunce D and Reid J (2021) Retirement in residential parks in Australia: Smart move or move smart, Urban Policy and Research, 39, published online 18 August 2021
- Hu X, Xia B, Skitmore M, Buys L and Zuo J (2017) Retirement Villages in Australia: A literature Review, Pacific Rim Real Estate Journal, 23:1
- IVSC, 2021, International Valuation Standards, effective 31 January 2022, IVSC, London
- McAuliffe B (2010) Valuation methods in resident funded retirement villages in Australia: a practitioner’s prospective, Pacific Rim Real Estate Society Conference Wellington, proceedings online
- Petersen M, Tilse C, Cockburn T (2017) Living in a retirement village: choice, contracts and constraints, Journal of Housing for the Elderly, 31:3.
- PwC/Property Council of Australia, (2020), PwC/Property Council Retirement Census, online: https://f.hubspotusercontent40.net/hubfs/2095495/2020%20Retirement%20Census%20Snapshot%20Report-1.pdf
- Towart L (2021) Retirement and Aged Care Property Valuation, Ch 12 in Principles and Practice of Property Valuation in Australia, third edition, 2022, Routledge.