The must-ask questions if considering retirement living

The census is run in collaboration with the Property Council and provides a comprehensive overview of the retirement village sector including data on village characteristics, resident demographics, financial structures, and future development plans.

The census shows that the majority of retirement villages are single level, broadacre or horizontal (71 per cent) with just 15 per cent being vertical or multilevel buildings and 14 per cent being a combination.

The average age of villages across the country is 29 years, the Northern Territory has the youngest village age of 12 years and South Australia has the oldest village age with an average of 39 years.

The census also shows that villages are getting smaller with the average number of homes in villages built in the last 10 years being 84 compared with 100 for villages built 10-15 years ago and 94 for villages that are more than 15 years old.

The average age of current retirement village residents is 80, with only 3 per cent aged between 65 and 74. While the legislation typically sets a minimum age of 55 to move into a retirement village, there were no reported residents under 65 years of age and the average age of people moving into villages was 75. The average number of residents per home is 1.26, with residents on average staying for around nine years.

The majority of resident contracts (76 per cent) are either lease (44 per cent) or licence (32 per cent) arrangements with strata/freehold contracts making up 5 per cent and rental contracts also being five per cent.

A little over half of retirement village contracts (excluding rental) have an exit fee based on the purchase price and don't share capital gain or loss with the resident.

Around a quarter of contracts (26 per cent) have the exit fee based on the outgoing price, sharing capital gain/loss with the resident and 17 per cent base the exit fee on the purchase price and share capital gain or loss.

The majority of contracts (65 per cent) accrue the Deferred Management Fee within six years with most exit fees (85 per cent) being 35 per cent or lower.

Retirement village contracts that give you some or all of the capital gain often require you to meet some or all of the costs associated with achieving it.

Such costs include renovations, marketing expenses and selling fees. The biggest of these is typically renovation costs.

The census showed that more than half (57 per cent) of renovations for homes in a retirement village more than 15 years old cost at least $40,000 with 28 per cent exceeding $80,000.

The average purchase price of a two-bedroom home in a retirement village jumped by 8.3 per cent to $559,000.

The census reports that homes in villages are around 57 per cent of the median house price in the same postcode but that's not really a fair comparison, given that exit fees don't apply to other homes.

Exit fees are used by villages to keep the purchase price of homes low, enabling downsizers to free up equity to invest or spend.

A growing number of retirement villages offer payment options enabling residents to pay their management fee when they leave, when they move in (for a discount) or paying no management fee at all (for a higher purchase price). Unfortunately the census didn't capture data on the range of payment options in the market.

The number of villages providing funded home care services has more than doubled since the 2021 census with 61 per cent of villages now delivering home care.

Despite that the most common reason residents left a village was to move into residential aged care (55 per cent) while 20 per cent passed away or were transferred to hospital.

When it comes to the development pipeline for retirement villages 55 per cent is expected to be in non-metropolitan areas with 45 per cent in metro areas.

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The most development is planned in NSW with 2464 units planned followed by Victoria (1346) and Queensland (1240). Less than half of new villages plan to have a residential aged care home (44 per cent), this likely reflects the funding issues and uncertainty around residential aged care pending the announcement of proposed reforms.

The census gives some great insights into the norms and averages of the retirement village industry. If you are thinking about downsizing to a retirement village it's useful to understand the bigger picture.

Just like the people who live there, retirement villages come in all different shapes and sizes. It's important to do your research, make sure your contract is a fair balance of rights, responsibilities and costs and crunch the numbers on what it means for you.