The retirement living sector is growing rapidly in Australia, as the population ages and demand increases for a spot in a retirement village.
For many people, the idea of having someone on site to help with property and garden maintenance is huge draw when considering a change later in life. For others, it is about the sense of community, the easy access to social activities and building a network of friends. As developers aim to attract younger residents, they are also raising the bar with luxury features and extra perks.
Retirement community accommodation can vary widely. From apartments and villas, to houses. Some villages offer a range of onsite amenities on offer including swimming pools, fitness centres, cinemas and cafes, providing a resort-style feel. Plus, there are often flexible dining and cleaning options available to make life even easier for residents.
Research released last year by the Property Council of Australia shows that retirement village residents are 41 per cent happier; 19 per cent less likely to require hospitalisation after only nine months; 15 per cent more physically active; five times more socially active; twice as likely to catch up with family or friends and have reduced levels of depression and loneliness.
One key factor that sets retirement villages apart from residential aged care facilities is that a retirement village living is considered independent living, generally without medical or personal care available through the village itself.
Different laws
Some residential retirement complexes include both independent living homes and aged care facilities, making it easier to transition to higher levels of care if needed. Especially if one member of a couple needs more assistance.
However, the two operations are regulated quite separately under different laws and there are no guarantees that you can move smoothly from one to another when you want to.
Unlike assisted living or residential aged care, retirement villages are not regulated by the Federal Government. Instead, are governed under state and territory retirement villages acts. As such, the rules can vary between jurisdictions and villages.
Considering the costs
Buying into a retirement village can be a big financial commitment, so it’s important to fully understand the legal implications and ensure you carry out a thorough check to determine if it’s something you can afford.
In most cases, you don’t own the village residence outright. Instead, a common arrangement is for a resident to enter a lease or loan. Where you buy the right to live in a home within the village for a specific period of time.
The level of fees and how they are set is a private commercial arrangement and not governed by any laws. The costs could be roughly what would be incurred if you owned your home. As well as an upfront price, there could be ongoing maintenance fees and deferred management fees, which reduce the amount you receive when you leave the village.
Knowing your rights and obligations, as well as the initial costs and ongoing fees and expenses are key considerations to a confident and successful transition.
Financial and legal advice is highly recommended to ensure clear understanding of the purchase arrangements and contracts. The level of complexity in these contracts are not to be underestimated.
Extra services and support
Most people want to stay in their own home for as long as possible.
For those living in retirement villages, this might involve accessing government-subsidised home care services – like the Home Care Packages Program. Depending on your health, these services can include cleaning and domestic assistance as well as personal care or the delivery of pre-cooked meals.
Following the introduction of recent reforms, a new Aged Care Act aims to increase the subsidies for services and equipment to assist people staying at home.
A new Support at Home Program will replace the Home Care Packages Program from 1 July 2025. The Commonwealth Home Support Program will transition after 1 July 2027.
The reforms also bring significant changes to the funding arrangements for residential aged care.
For both home care and residential aged care, the focus will be increasing the quality of services and the rights of individuals, while at the same time looking for greater contributions from those using the services.
Retirement villages are largely lifestyle considerations, but you also need to consider your current and future care needs to ensure that the village you choose will remain suitable for at least the medium term.
Next steps
There is a lot to consider when determining the right option for you.
Contact your local Nexia adviser to discuss your personal situation. Our team can support you with navigating this important decision.
