by Kathryn Greiner AO
Let’s talk about housing as we age.
A lot of Baby Boomers decide to test out a Retirement Village to see if that meets their needs. There are over 600 Retirement villages in NSW, and about one-third are located in Sydney Metropolitan area. A lot are also located on the North and South Coast, but if the regions are your choice, there should be options available too. So geographically there should be no problem.
But let’s take a look at some key issues to think about –
- Remember unlike residential property where you own the land and the house, a contract in a Retirement village only gives you a “a right to occupy”. You never actually own your unit because you will have signed a contract leasing it from the proprietor. There are different types of tenure of contracts available that provide varying levels of services and offer different financial arrangements. Make sure a lawyer reads the contract, and an accountant goes through the costs with you so you can choose what best suits your needs.
- Check out the age of the Village itself. Does it have steps to the Units? Are the footpaths wide enough for motorised scooters, walkers etc? Remember RV’s are for the “over 55’” but the current age of entry is 75 and average resident age is 80 years. So, who uses that attractive Swimming Pool? Ask about plans for ‘Ageing in place’.
Which leads to the last point –
- Don’t forget to discuss the exit strategy. Usually there are only two ways of leaving a RV, one of them is to Aged Care. Make sure you are clear about return of your investment capital and what arrangements can be made to move you to aged Care. Legislative changes are in place for this issue but get it in writing from the proprietor.
Retirement Villages offer a great lifestyle choice based on a sense of community, safety and security, increased access to support services and reduced maintenance. Nearly all residents thrive and love the lifestyle but as always it pays to look before you leap.
BACKGROUND: Greiner Inquiry into NSW Retirement Village Sector
The NSW Governments inquiry into the State’s retirement village sector, led by Kathryn Greiner AO (Greiner Report) identified key areas to be improved upon within the sector, including:
Increasing transparency surrounding exit entitlements and contracts; clarifying the funding arrangements for ongoing maintenance costs shared between resident and Operator; and
providing more support for dispute resolution.
Since the inquiry the NSW Government introduced a series of amendments that have already been made under the Retirement Villages Amendment Act 2018.
The most recent reform, the Retirement Villages Amendment Act 2020 came into force on 1 January 2021. The Asset Management Plans Regulation commenced in 2021 and introduced regulations around Asset Management Plans in Retirement Villages.
Useful links –
Canstar: Retirement village costs and how they work
NSW Fair Trading: Moving into a retirement village
Aged Care Guide: how much does a retirement village cost?
CHOICE: Retirement villages: what to consider
CHOICE: Retirement village reforms