Retirement construction boom emerges as Australia’s unexpected solution to housing crisis

At a time when Australia grapples with a swiftly ageing populace and an existing housing dilemma, the retirement living sector emerges as a knight in shining construction gear, leading the charge into 2024. Amidst this backdrop, the latest Property Council Survey casts a beam of hope, showcasing robust confidence in the boom and capital value spike in retirement living construction activities expected over the next 12 months.

Eclipsing other property sub-sectors in optimism, retirement construction activity has hit its stride, reaching the highest surge of confidence since March 2022. The industry’s projected growth could see it surpass residential, office, retail, and industrial sectors combined.

Daniel Gannon, the Retirement Living Council’s Executive Director, welcomed the building momentum. “While the positive sentiment around construction activity is an encouraging sign, there is still plenty more left to do if the country is going to keep pace with the housing needs of its ageing population,” he pointed out.

Prepared for the silver tsunami, Mr. Gannon highlighted the far-reaching implications of an ageing Australia, “With the number of Australians over the age of 75 set to increase from two million to 3.4 million by 2040, more age-friendly housing must be supported by all levels of government.” He went on to outline the transformative potential of the planned pipeline, with 18,000 retirement dwellings primed to whittle down the national housing gap by almost 18% by 2030.

Despite this, Mr. Gannon didn’t shy away from the hefty requirements ahead, asserting that “if industry wants to keep pace with current market penetration of over-75s, we will need an additional 49,000 units over and above what is currently in the pipeline.” A step-up that could slice the housing shortfall by a significant 67%.

Positivity aside, Mr. Gannon was frank about the roadblocks the sector may face, such as soaring construction prices, material costs, and labor uncertainties. Not to be overlooked, legislative reforms loom large, potentially tangling the supply web for retirement living operators in two-thirds of Australia’s markets.

Highlighting the need for government awareness, Mr. Gannon points out, “Governments need to better understand that retirement villages across the country save the federal government a billion dollars every year as Australia’s population continues to age.”

Through ingeniously designed homes that taper off mishaps like trips and falls, retirement villages foster fewer doctor visits, abbreviated hospital stays, and defer entry into aged care facilities. This isn’t just a win for the residents; it’s also a reprieve for a strained health care system, allowing it to redirect resources to the most urgent cases.

As construction in the retirement living realm sets a brisk pace, it carries with it the potential not only to mend housing gaps but also to lend a supporting hand to an overextended health care infrastructure. It’s a twofold promise awaiting realisation amidst an era of change and challenge.