Stockland launches new retirement home concept

Stockland launches new retirement home concept

16 February 2018

Diversified property group Stockland has launched a new concept in retirement living designed to increase the appeal of villages purpose-built for ageing Australians, reports The Australian.

Stockland has begun construction in Sydney and Perth on two new developments for over-55s featuring two-and three-bedroom, low-maintenance homes to be sold under community title.

Residents would be required to pay all costs upfront but would retain all capital gains and complete ownership of their home and land.

A monthly levy would apply to maintain community facilities but owners would be free to sell the property as desired, with no exit or deferred management fee.

Stockland retirement living chief executive Stephen Bull said the concept from research that found only 5 per cent of Australians aged over 65 live in a retirement village.

“We thought, ‘How do we broaden that reach, what are some of the things we can do to attract more retirees to live in a village-type environment?’ given we know that when they do, they tend to love it,” Mr Bull said.

“We thought one of the barriers may be just the financial structure of a retirement village whereby a resident of a traditional village moves in, they take a lifetime lease over the premises but the operator retains ownership.”

He said doing away with exit fees was expected to be appealing to some following negative publicity about the traditional retirement village model last year.

The price of a two-bedroom, two-bathroom, one car-park home in the Aspire Sydney village in Marsden Park, would start at $655,000.

All homes are architecturally designed with attached garages, generous sized bedrooms, large ensuites and designer kitchens.

People of any age could buy a house, but only those aged 55 and over can live there.

Mr Bull said Stockland was keen to roll out the concept in other states, but first had to overcome some legislative hurdles. “Because this product doesn’t fall under the Retirement Living Act, we need to get planning support,” he said.

Even without any growth in the proportion of people living in retirement villages, Australia would need another 100,000 individual homes in the next 20-years.

“That represents on average 5,000 new homes a year, just to maintain that 5 per cent penetration rate,” Mr Bull said.

“The market’s not delivering that at the moment, there’s an undersupply of new product and retirees today have very different expectations of those from 10 or 20 years ago.”

He said modern retirees wanted more open plan living, and to maintain their independence.

Gerard Brody from the Consumer Law Action Group, said he’d like to see one of the contracts to see how it was structured but the general idea was encouraging.

“This model does appear to be more like a traditional land sale rather than a contractual licence of the lease/loan arrangement of most retirement villages,” Mr Brody said.

“Also the absence of deferred management fees is positive.”

Late last year, The Australian cited research from the Property Council of Australia (PCA) and Price Waterhouse Coopers that retirement villages around the country were near full and will be unable to house the growing wave of older Australians.

The report said that 65-plus population is forecast to grow by 5 million over the next 40 years.

The PCA is calling for changes in state government policy to encourage more new villages to be built because many existing villages were outdated and not suited to older people.

The sector is in focus after a Fairfax/Four Corners report earlier this year which saw a class action launched against listed retirement living operator Aveo.

Image: Stockland