Helping Australians retire in style, comfort and security
The Retirement Village Association of Australia is the national body that represents national retirement village developers, owners, operators, managers and industry specialists. With over 750 members, it has seen a steady increase in membership at a rate of 20 per cent in the past two years.
“Retirement villages began to appear 1970’s and 80s”, says Andrew Giles, CEO of the RVA. “A retirement village essentially can be defined as a housing development designed specifically to cater to the needs and lifestyles of people aged 65 and over,” he says.
“Most residents of these villages enter into them in their 70s as part of a move to downsize, decrease maintenance responsibilities, experience a greater sense of safety and security, or for health and lifestyle reasons,” says Mr Giles, adding that “not only has this lifestyle shift been of benefit to residents, but it has also freed up residential housing for younger families, stimulated the local economy and reduced the pressure on aged care, and medical infrastructure.”
According to Mr Giles one of the great successes of the industry is that it reduces demand on local services for seniors but remains a unique and innovative model with an emphasis on lifestyle.
In Australia today the industry represents over 1,850 villages and communities that are supported by both the private sector and non-profit organisations. These communities house and support more than 160,000 people over the age of 65 who report very high levels of satisfaction with their experiences in a village.
The stronger the RVA becomes by adding to its membership, the more easily it can represent the industry with a united voice. This has become more important in the past 10 years because Australia is becoming a more regulated and legislated environment.
This transition has not happened over night, and the resulting state legislative environments, first designed to protect clients of retirement villages can, if not carefully implemented, negatively impact the viability of the industry as a whole. This in turn may limit future investment in housing for older people in Australia. “The industry is highly regulated, which brings with it great security for residents, but often higher costs for developers,” says Mr Giles.
Mr Giles stresses this, saying that “returns in the sector are often lower than other traditional forms of property, and these returns are achieved over longer timeframes. As such, any significant change to legislation can have significant cascading impacts to the industry. This is occurring at a time the Government is committed to cutting red tape and exploring harmonization across states. For this reason, a strong industry association that can work with and inform Government is critical. This is a fundamental role for the RVA to show leadership for the industry.”
The returns may not be immediately recognizable, but what can be said is that through supporting retirement villages and care facilities there is quite a positive effect on the economy. “The sector is a major contributor to the national economy and as the industry grows it will become more economically significant,” he says.
“The construction and maintenance expenditure for the industry alone means there is more than $18 billion of direct and indirect expenditure (NPV over 20 years) to Australia’s economy. In addition, the industry generates some $3 billion service related [expenditures], with multipliers into smaller regional economies in many cases,” says Mr Giles, pointing to another indisputable positive effect- simply put: the industry creates much needed jobs. “Industry growth could see the delivery of some 35,000 jobs per annum – direct and indirect employment. It is critical for the RVA to continue to reinforce this message to Government and the broader community.”
What the RVA does for its members
The role of the RVA is not only to work with the government agencies, but to represent the industry to ensure environments that a consumer would desire to live in. “The RVA’s core role is to unify and represent the industry to ensure its continued growth and responding to Australia’s massive future housing need for older people,” says Mr Giles. This goes deeper than it would appear because the industry has faced new demands in recent years. The first is the increased demand for services in an environment where access to debt and equity to fund growth is challenging.
A second issue is that retirees have higher expectations for the level of accommodation and care than ever before. This is costly to deliver, not only because of their expectations but due to the high standards that the industry holds itself to. This means that businesses that the RVA represents have to manage their costs very carefully. Affordability, says Mr Giles is a “driver of choice for people and retirement villages continue to represent choice in living options for people over 65.”
So where can they get additional funding? “There is also great opportunity for the private sector, church and charitable groups and Government to work to facilitate models of choice in retirement living, including rental and/or new financial options to meet the diverse needs of the consumer.”
Why people are Choosing Retirement Villages
“What is clear is that people enjoy living in retirement villages. More than 95% of residents indicate village life meets or exceeds their expectations,” says Mr Giles pointing out that there are “key reasons people choose a village”. Choice, he says, is an important part of what Retirement Villages in Australia represent. “Unlike a move into residential aged care, which is usually predicated by a sudden decline in health or escalation of a neurodegenerative disorder, it is important to note that consumers choose to live in a retirement village and generally view this choice as a way of enhancing their quality of life.”
Mr Giles says that among these factors are security and support. Australians are living longer than ever before, and the older the individual the more health issues they are likely to experience. “As people age and health needs increase, the great lifestyle offer, down-sizing the requirement for maintenance of property and grounds, being able to ‘lock and leave’ for travelling and social interactions with likeminded and similar aged people,” becomes very important.
For the present and the future, Mr Giles says that “the RVA is committed to informing and educating Australians about why retirement villages are great places to live and will seek out opportunities to spread the word.”