The national average price of a two-bedroom Independent Living Unit (ILU) in a retirement village increased from $463,000 in 2020 to $484,000 in 2021 and $516,000 (6.6%) in 2022, according to the PwC Property Council Retirement Census.

CoreLogic’s June 2024 median dwelling house price reflects how much more affordable it is to move into a retirement village compared to the local residential market.

Some 57% of independent living units are on loan lease, 37% are on a loan license and 11% are on strata or freehold title.

Different rules apply across states/territories but entry to a loan lease retirement village involves paying an entry payment for the ILU you wish to occupy. This payment usually goes to the village owner as an interest-free loan for your occupancy.

In return, the resident is likely to be given a 99-year lease on their home, which gives access to the residence and the village’s facilities.

The resident would also be asked to pay ongoing (service) fees that help to cover the cost of keeping the village facilities in good order. According to the Retirement Living Census, the national average monthly service fee for two-bedroom ILUs rose from $502 to $620 over the 18 months to December 2022. The average fee difference between Metro and Regional villages was approximately $84.

Increasingly, retirement living operators are delivering aged care services to residents in their village properties either through an outside home care provider or through themselves.

When the resident or the resident’s family leaves the property, they could be required to pay fees and charges, often called a Deferred Management Fee (DMF) which covers the cost of your time in the village.

Residents may be able to set the sale price of your ILU through an independent real estate agent, they could also be able to appoint the village owner to handle the sale on their behalf. In either case, selling fees can apply.

A Loan License Agreement

This differs as there is an Entry Payment, also known as an Ingoing Contribution, which guarantees you the right to live in your home.

A fortnightly fee, also known as a ‘recurrent fee’, which covers Council and water rates, building insurance, maintenance both inside and outside your home, gardening, upkeep of any shared facilities and the cost of any village staff.

Flexible Entry Payment Options

Most retirement villages provide flexible entry payment options. A standard option is a guaranteed 70% return of the entry payment if the resident stays at least six years. The remaining 30% will be deducted as the DMF. The provider must account for how the money is deducted.

There is often an option to pay a higher entry payment, which the resident or their family receive back in full should you leave at any time.


This content is for informational purposes only and is not financial advice. Consult a licensed financial advisor before making any investment decisions.