In this guest post, Daniel Gannon, Executive Director of the Retirement Living Council, discusses the Victorian government’s plans to address housing shortages, including 800,000 homes in the next decade. Gannon claims retirement communities offer an affordable solution for the growing ageing population, with potential cost savings of $3.5 billion annually, calling for an increase in land availability and policy reforms for sustainable housing solutions.
The Victorian Government’s Housing Statement is in many ways a landmark moment for housing supply in Australia.
This roadmap outlines a plan to deliver millions of additional homes across Victoria – including 800,000 over the next decade – to help respond to pressures that have been building up for years.
Ambitious plans are important, and so are effective and efficient planning systems that provide homes for those who need them most.
And when it comes to an affordable housing option available to a growing cohort of Australians in an otherwise unaffordable housing market – there’s one hiding in plain sight.
Retirement communities are a housing solution whose time has come given the great Australian dream of home ownership is becoming a nightmare for many. This sentiment was underscored by the recent 2023 Intergenerational Report and addressed by Premier Andrews.
We now know there are 4.6 million people around Australia aged over 65 today, a number that will grow to 7.1 million by 2043 – representing a 54 per cent increase in only two decades.
In a Victorian context, this cohort is forecast to grow dramatically by 650,000.
Hence, it’s critical that governments understand these opportunities as they plan for the significant increase of older Australians and as the Commonwealth aims to keep the aged care sector operational.
While the demographic and housing outlook might sound grim, there is a solution to this crisis.
The more than 2,500 retirement villages across the country can allow residents to maintain their independent lifestyle as they age, while still enabling them access to care, support services and community.
As states like Victoria undergo a demographic change, more needs to be done to support this new, more active generation of older people.
This population shift will also have socio-economic impacts on the nation, including the housing supply shortage and the pressure on an already struggling residential aged care sector.
By reducing barriers to physical activity and providing access to gyms and fitness facilities, retirement communities help residents remain more frequently active than those living independently in the community and interacting with hospitals and GPs less frequently.
This should be music to the ears of Governments everywhere because this results in significant local, state and commonwealth financial efficiencies. To be precise, almost $3.5 billion every year.
But the real hero of this story is affordability and can help turn this housing nightmare into the great Australian dream – but only if planning systems are enabling new supply rather than holding it up.
Retirement communities are designed to provide an affordable option for older Australians, with entry prices across the country on average 48% lower than median house prices in similar areas.
But the problem isn’t necessarily affordability for this housing type – it’s growing demand and dwindling supply.
If this ambitious plan from the Victorian Government puts an end to retirement operators waiting up to five years for development applications to be approved in metropolitan areas around the country, then this is great news for the industry.
For too long, planning systems have held up supply and unnecessarily driven up costs for developers through extensive delays.
And if you think the solution to these escalating planning problems is complex, think again.
Instead of holding back and delaying supply, councils and governments should be increasing land availability, expediting processes for planning and building permits, and through minimum land allocations in undersupplied areas.
But it doesn’t just start and stop with planning systems.
The Federal Government should increase the asset-free threshold for aged pensioners, allow retirement village residents to access the Home Equity Access Scheme, and continue to reform Commonwealth Rent Assistance.
Until governments get serious about some of these important policy reforms that would unlock and facilitate more supply, our housing problems will continue to get worse at the same time that our population ages.
It’s one thing to release an ambitious plan – it’s another thing to follow through on it.