The age a person is legislated to enter a retirement village is 55, yet the expected retirement age for men in Australia is 66.2 years, the highest since 1972, and 64.8 years, the highest since 1971, for women.

The latest Property Council PwC Retirement Living Census shows the average age of people moving into a village is 75 years. The average age of current retirement village residents is 80, with only 3% aged between 65 and 74.

If entering a village, the average length of stay has increased to nine years. The 2015 Census reported the average stay of village residents was seven years.

A factor will be that the number of retirement villages providing home care has increased markedly to 61%, compared to 46% 12 months earlier. This is delaying the entry into residential aged care.

Contracts

76% of resident contracts are either lease (44%) or licence (32%) contracts with strata/freehold contracts and rental contracts each 5%.

A little over half of retirement village contracts (excluding rental) have an exit fee based on the purchase price and don’t share capital gain or loss with the resident.

26% of contracts have the exit fee based on the outgoing price, sharing capital gain/loss with the resident and 17% base the exit fee on the purchase price and share capital gain or loss.

65% of contracts accrue the Deferred Management Fee within six years with 85% of exit fees being 35% or lower.

Retirement village contracts that give residents some or all of the capital gain often require the resident to meet some or all of the costs associated with achieving it, including renovations, marketing expenses and selling fees. The biggest cost is normally renovation work.

The census showed that 57% of renovations for homes in a retirement village more than 15 years old cost at least $40,000 with 28% exceeding $80,000.

The average purchase price of a two-bedroom home in a retirement village jumped by 8.3% to $559,000.

The census states homes in villages are around 57% of the median house price in the same postcode but it is an unfair comparison, given that exit fees don’t apply to other homes and most homes in retirement villages are apartments or villas.


A growing number of retirement villages offer payment options enabling residents to pay their management fee when they leave, when they move in (for a discount) or paying no management fee at all (for a higher purchase price). The census did not capture data on the range of payment options in the market.

Important information

Operators can ask residents to pay a maximum of $50 towards the cost of preparing a contract.

Prospective residents must be given a copy of their proposed contract at least 14 days before signing it. Prospective residents are advised to get independent legal and financial advice before signing the contract.

 If a resident changes their mind after entering a village contract, they can end the contract during the cooling-off or settling-in period.