As the country faces a rapidly approaching silver tsunami of older Australians and an ongoing housing crisis, retirement living construction activity levels are forecast to continue to lead the way in Australia.
The latest Procore/Property Council Survey reveals Australia’s retirement living industry is forecasting strong confidence around construction activity over the coming 12 months, while capital value growth sentiment has bounced back in most jurisdictions after a decline in the previous quarter.
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 was another reason for the Australian Government to include retirement communities as a key delivery component of achieving the National Housing Accord target to build 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,” Mr Gannon said.
“In order to maintain existing market demand, the retirement living industry requires 67,000 units to be built by 2030.
“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.
Mr Gannon said while the survey is largely positive, there are still a number of variables that could place a handbrake on much needed supply.
“There is still much uncertainty across all property sub-sectors, with construction prices, materials and labour continuing to drive uncertainty,” Mr Gannon said.
“The other variable for the retirement living sector is legislative reform, which is taking place in every corner of the country and impacting two thirds of Australia’s retirement living markets.
“This is particularly relevant in WA, one of the states currently undergoing legislative reform, with the survey showing a sharp decline in forecast capital value growth.
“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.
“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,” he said.
