Most communities across Australia have a retirement village nearby. In fact we have close to 2,200 villages, making us second only to America, by population, in the number of villages (with New Zealand a close third).
The relative popularity of retirement villages in each country is about the same, with around one in 12 people aged 75+ making the village choice.
In Australia we have 170,000 people living in approximately 140,000 village homes. Sixty per cent of the villages are owned by private operators and 40 per cent are owned by church, charitable and other not for profit operators.
However, this hasn’t always been the case. The establishment of the first retirement village is claimed by the Brisbane Methodists when one of their congregation, Mr George Marchent who owned Marchent Softdrinks, noticed the lack of accommodation and support for ageing widows. He funded a small village in the early 1920s now known as Whellar Gardens. The original homes are still occupied.
In 1954 the Prime Minister Robert Menzies introduced the Aged Persons Homes Act which provided incentives to not for profit organisations to build additional accommodation for widows. These incentives were discontinued when the Aged Person’s Home Act was amended in 1974 by the Whitlam Government, becoming the Aged or Disabled Persons Home Act.
In the late 70s private developers identified the American trend of lifestyle retirement villages at affordable prices, a concept that struck a chord with retiring World War II veterans that had little cash reserves and lower life expectations than we have today.
Between 1980 and the 2008 Global Financial Crisis, over 1,100 private retirement villages were built, while, no longer receiving subsidies, the not for profit operators largely moved away from villages.
The new landscape
Since 2008 the number of private retirement villages being built has been constrained by a lack of bank funding. At the same time, not for profit operators have started gearing up retirement village development because it provides good profits and answers their mission to provide affordable housing.
Not for profit operators have an advantage over private operators in having access to land, through their church and charitable activities, especially in strong metropolitan locations.
The smaller, private operators are forecast to dwindle as they struggle to obtain land on the fringes of metropolitan areas. Large commercial village operators, like Aveo, Lend Lease and Stockland, have the resources to fund apartment style villages to be built closer to city centres and catering to the coming baby boomers.
The volume of new villages being built however is unlikely to match the growing numbers of people approaching age 75, the natural market for retirement villages. The result is likely to be increased demand and increasing prices for the limited number of village homes available.
