Stantons Research
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New Supply: Retirement Living in Manufactured Home Estates
Retirement living in Manufactured Home Estates has significantly increased in popularity over the past two decades. Demand by Australia’s ageing population for this type of housing has encouraged expansion by existing and new operators. This paper looks at the future growth of this type of housing and identifies locations where new estates are proposed.
Along with the established retiree regions of coastal New South Wales and Queensland, operators are now targeting Victoria with nearly 40 proposed developments in that state. In addition to the conventional retiree regions, operators are targeting outer suburban locations around Melbourne.
Retirement Living as Recorded by the ABS
There is a lack of concrete information as to the size of the Australian retirement living industry and the number of older people living in these properties. The Australian Bureau of Statistics (ABS) provides a five yearly Census of Population and Housing (Census) where the dwelling location can be used to determine the number of properties and the size of the population in this type of housing.
Using a case study area of the Central Coast, Newcastle and the Hunter the accuracy of the 2021 ABS Census data can be examined. This research identifies that the number of dwellings (and population) in MHEs is understated and the number of dwellings (and population) in retirement villages is overstated.
The potential for downsizing
The issue of encouraging downsizing by seniors (65+) often receives media attention; focusing on specific locations and then drawing generalised conclusions. Research into NSW locations with high numbers of seniors living in accommodation with “spare bedrooms” shows that reality is more nuanced. These locations include leafy Sydney suburbs; however they also include the Western Suburbs, country towns and retiree destinations.
This has implications for any policy designed to encourage downsizing as the impact would be across a range of locations. Moreover many of these locations lack “size appropriate” alternatives.
Retirement community residents are becoming better connected
Australian retirement community residents and seniors are becoming increasingly more connected. Research into internet connectivity of retirement community residents shows that there are communities which have over 90% of residents who are connected to the internet. However there is considerable difference between individual retirement communities as to the proportion of residents who are connected.
Over 50% of seniors (65+) in the surrounding municipality are internet connected which has implications particularly for communication and marketing to this group. While this research did not look at what retirement community residents were using the internet for, this greater connectivity reduces the requirement for physical proximity to retail and banking facilities.
Retirement Village Residents – Are They Healthier, Wealthier and Wiser?
Previous studies into DMF Retirement Villages have attempted to quantify the total number of villages, the types of owners/operators and estimated the number of residents. To date there has been little Australia wide analysis of retirement village residents to quantify this population group and measure whether they differ from residents in the surrounding locality and between regions.
Australia's ageing population brings the requirement for age-appropriate accommodation therefore identifying how residents are utilising the existing retirement village product is of benefit to strategic decision makers, planners, investors, developers and village operators.
This research correlates individual retirement villages with smallest area of 2011 ABS Census data (Statistical Area Level 1 (SA1)) to build up a picture of Australian retirement village residents.
Retirement Village Valuation Metrics October 2012
The owner/operator of a village receives their return at the end of residents’ tenure, therefore the value of this return can only be estimated based on projections including the length of tenure of the current and future residents, increase in sale price of units and future demand for units.
This difficulty in projecting future returns results in an opaque market for investors , financiers and residents alike which has been cited as a contributing factor for the lack of enthusiasm by institutional investors in the sector. This paper presents original research into valuation metrics including the length of resident tenure (Duration) and the proportion of units which transact per annum (Turnovers) component parts used in the Monte Carlo simulation that is being applied to the DCF analysis that is increasingly being used in the sector.
Retirement Village Resident Duration March 2012
Distribution of Resident Duration comprises initial analysis of a sample of retirement villages over time. This identifies a significant difference between the distribution of duration of initial residents and rollover residents.
The latter group shows a significantly more skewed distribution with a mean nearly 50% of the former.