Retirement living is no longer discounted housing
For decades, retirement villages have competed on affordability. Not anymore.
New developments are proving the product is not simply “discounted housing”, rather retirement living is competing directly with the mainstream apartment market.
Consider Hyegrove Willoughby on Sydney’s Lower North Shore. At completion, 97 of the project’s 111 apartments had sold at an average price of $2.8 million, with pricing Hyecorp states is 28% above comparable residential apartments in the local market where unit prices generally sit somewhere between $1 million and $1.5 million.
At the same time, there is the sell down of Arcadia by RetireAustralia. Villages.com.au shows two-bedroom ILA priced from $1.175 million as a price lead, with most sitting above the $1.5 million. A comparable development within the same area lists a two-bedroom unit at $1.479 million.
These projects are not alone.
Across parts of the retirement living sector, operators are beginning to price above the median unit price for an area. A strategy that suggests older Australians are no longer viewing retirement villages as a discounted alternative to residential apartments. They are the genuine alternative.
But premium pricing raises the operational bar permanently.
Care now non-negotiable
If operators charge above-market pricing, buyers will expect above-market operations. Hospitality standards matter. Village Management and staffing matter. Culture matters. Maintenance response times matter. Food matters. Wellness matters.
And care matters to the point it is non-negotiable. Hyegrove Willoughby has HyeCare and Arcadia by RetireAustralia has Care Hubs. Ageing in place is, as good as, guaranteed.
Hyegrove’s average age of entry is 82 for females and 84 for males. That is materially different from the traditional new development retirement village buyer profile of a decade ago, where many projects attracted residents in their early 70s.
Older Australians are no longer simply buying square metres. They are buying confidence about the next decade of their lives. The value proposition of retirement living is shifting from the promise of independence to the realisation of dependence.
That dependence increasingly centres on ageing in place, future support pathways and proximity to care when it is eventually required.
In practical terms, this means care is no longer a distant consideration. It is becoming part of the immediate purchasing decision. And justification for the exit fee.
If older Australians are prepared to pay more than the surrounding apartment market to live in a retirement community, perhaps the sector has been undervaluing itself for years.