Retirement living construction activity forecast to grow as Australia faces ageing population
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Australia’s retirement living industry is forecasting strong confidence in construction activity over the coming 12 months, according to the latest Procore/Property Council Survey, as the country faces a rapidly approaching “silver tsunami” of older Australians and an ongoing housing crisis.
The survey reveals that confidence in retirement construction activity is at its highest since December 2021, outperforming other sub-sectors, and is forecast to be greater than residential, office, retail and hotels combined.
Retirement Living Council Executive Director Daniel Gannon said this positive sentiment highlights the potential for retirement communities to be a key component in achieving the National Housing Accord target of building 1.2 million new homes by 2029.
“The Master Builders Association only this week forecast that the Australian Government will fall short of its target by 112,675 homes, but there’s a silver lining to this scenario,” Gannon said.
“In order to maintain existing market demand, the retirement living industry requires 67,000 units to be built by 2030.”
Gannon noted that this would represent 59 per cent of the gap identified by the MBA, meaning age-friendly communities can help the government solve Australia’s housing supply problem.
“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 that keeps people out of hospital and aged care facilities must be supported by all levels of government,” he said.
However, Gannon also pointed out that there are still variables that could place a handbrake on much needed supply, such as construction prices, materials and labour continuing to drive uncertainty across all property sub-sectors.
He also highlighted that legislative reform, which is taking place in every corner of the country and impacting two thirds of Australia’s retirement living markets, is another variable for the sector.
“This provides an important reminder that if these reforms make it harder for operators to build and operate age-friendly communities, it could tighten the supply clamp at a time when confidence remains high, construction activity is strong, and when the nation needs housing,” Gannon said.
“Governments need to better understand that retirement villages across the country save the federal government almost a billion dollars every year as Australia’s population continues to age.”
The survey showed a sharp decline in forecast capital value growth in WA, one of the states currently undergoing legislative reform.