Ask anyone in real estate which market sector is leading the pack and they’ll no doubt answer housing for seniors. Much like the first home buyer boom of the 70’s and 80’s, followed by the lifestyle housing boom of the 90’s and early 2000’s, the retirement housing boom is set to explode. But there’s a problem; the housing market is not prepared for the silver tsunami about to hit us.
Before we detail the problem and some solutions, let’s consider some facts.
According to the Australian Bureau of Statistics the number of people aged 65 and over is growing at twice the rate of the rest of the population. By 2026 more than five million Australians will be over 65, and in WA the number will be around 600,000 which is an increase of 100%.
Most of these people will continue to live in their existing home however WA’s aging population is also set to see an influx in the need for senior’s accommodation dubbed the ‘silver tsunami’ but outdated planning policy and a restrictive Retirement Living Act is seriously impeding the industry’s ability to meet the next wave of demand.
While the number of people seeking accommodation in retirement villages is set to double in line with the growth in numbers of seniors, the supply of new retirement village dwellings is not growing at the same rate, which is resulting in a supply shortfall. It is expected that at least 27,000 residents will be forced to move into standard residences rather than more suitable retirement dwellings over the next decade. This will increase the pressure on government to spend on health and aged care, in home support and other living services offered by retirement villages.
Barriers to Growth
There is a significant amount of barriers to growth of the retirement living industry which has stalled development over the last decade at a time when there in growing need and demand for retirement villages. The industry is struggling under the weight of increasing legislative and regulatory review and change which has created undue levels of uncertainty. This lack of certainty has a flow on impact to the financial services sector in funding growth of the industry as an investment class. Excess legislation and regulation imposes unfair cost on operators, which affects their ability to deliver sufficient housing at affordable rates.
Initiatives to drive the industry’s growth
The ability to grow the supply of retirement living options for the community, which will relieve pressure for the government, must be fostered by active support.
The industry is calling on the following:
- Ensure future changes to retirement living laws play an active role in delivering more accommodation which is vital to WA communities
- Facilitate the creation of an effective consultative committee that was a focus on growing the provision of response accommodation options and actively engages with industry
- Investigate the creation of incentives ( e.g. planning and land release programs) that ensure appropriate accommodation can be developed affordably in areas where people need it; and
- Establish a more effective governance structure that fosters industry growth.
The industry would also support the appointment of a minister for retirement living and a department that brings together the raft of agencies that currently have regulatory oversight for the housing needs of seniors in WA.
Lino Iacomella is the WA Executive Director of the Property Council.