Retirement Village

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If the only inevitabilities in life are death and taxes, then the economy and government policy will start to reflect it.
This is particularly evident when the baby boomer generation goes through the significant transition to retirement.
In March 2017, an unprecedented value of building work was approved in construction of aged care facilities, totalling $340 million over the month.
Australia’s population aged 65 and over is an estimated 3.7 million people by the Australian Bureau of Statistics (ABS). Approximately 5 percent are living in retirement communities, or some 184,000 Australians. Based on current projections, Australians aged 65 and over will make up over 20 percent of the population in 10 years’ time.
Despite a rapidly ageing population, the reality of developing aged accommodation – particularly retirement villages – is a harsh one. Like many assets, growth in the residential housing market has crowded out capital for aged accommodation.
According to a 2016 joint survey by the Property Council of Australia and Retirement Living, the national average price of a standard, two bedroom independent living unit increased just over 3 percent between 2015 and 2016. In the same period, CoreLogic data shows the national standard dwelling increased 7.3 percent.
Competition for vacant land, age friendly regulation compliance and investment into green technology to reduce long term service fees are factors that can inflate initial investment. This is amplified by the average tenure in retirement villages, which is approximately 12 years.
However, some areas across the country lend themselves to aged care development. Advantages such as relatively affordable land and mild climates make them popular with retirees. New incentives to downsize introduced in the federal budget may further boost these areas.
CoreLogic data of aged care facilities, independent living units and retirement villages reveals the areas most likely to benefit from the ageing population.
Of the states and territories, the most aged accommodation construction is occurring in New South Wales. The state has 113 projects with construction commenced or imminent over the next five years.
Within New South Wales, the highest frequency regions for construction were The Hills Shire, Newcastle, Wyong and Gosford. Between these regions, there are 26 aged care accommodation projects either approved or commenced, with completion expected by 2023. Newcastle, Wyong and Gosford offer lower land prices along the coast. As for the Hills Shire, while its lack of public transport to the city makes it relatively unattractive for young professionals, the area has a quiet, leafy exclusivity for retirement communities.
The number of aged accommodation developments in each state and territory is generally proportionate to population. The exception is South Australia, where there are 56 developments expected to be completed over the next few years. Of these, 10 are located in Onkaparinga Council, and 6 are located in the Port Adelaide Enfield region. South Australia has a higher proportion of 65’s and over to the total population.
Looking at individual council areas, Brisbane City is by far the most popular spot for aged accommodation projects. In the last 5 years, the region has seen over $725 million in aged care and aged living construction, ranging from upgrades of existing facilities to a $60 million integrated care facility at Carina. By 2020, a further 22 projects in the space are expected to be completed. In the same period, a further 11 are planned for the Moreton Bay Regional area, 9 in the Sunshine coast and 5 in Toowoomba.
A common trend in new developments is the blending of care types in the one precinct, such as the three tiered levels of care in The Village Coorparoo, mean that people are likely to stay on the one site for a longer period of time, or, ‘age in place’. The ageing in place model was also adopted in the recently completed Woodlands Aged Care Facility in the Sunshine Coast.
In the residential care sector, the Aged Care Financing Authority estimates that over the next decade, approximately 76,000 new places will be required, compared with just 35,000 established in the previous decade. In addition, much of the existing stock will require a knockdown and rebuild. The forecast investment required over the next decade is $33 billion. While the initial costs make aged accommodation unappealing for the average investor, the boomer retirement transition could represent a further boom for the construction industry.
Cameron Kusher is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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The areas capitalising on an ageing population: Cameron Kusher

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The NSW Government has signalled it will ensure there are more transparent fees for retirement village residents through new laws.
They will also seek to ensure that exit entitlements paid more quickly when residents depart their village.
Minister for Better Regulation, Kevin Anderson, said the new reforms will improve access to exit entitlements, create a new mechanism to support residents moving to aged care, and place a 42-day cap on the payment of recurrent charges for general services.
“We promised to make retirement village fees fairer, and these reforms will put residents first, saving them thousands of dollars and giving them access to their exit entitlements sooner when they leave the village,” Mr Anderson said.
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Under the changes, if a unit remains unsold after 6 months in metropolitan areas or 12 months in the regions, residents will be eligible to receive their exit entitlements if the village operator has not taken reasonable steps to facilitate a sale. The reforms respond to several key recommendations of the independent report into NSW Retirement Villages conducted by Kathryn Greiner AO, which found residents could wait years for their unit to be sold by the operator before they received their exit entitlements. “Waiting extended periods of time to receive your exit entitlement can cause a financial and personal burden. That’s why we’re putting in a safety net that will require operators to buy back the unit from the resident if they don’t use their reasonable endeavours to sell it within the appropriate time period.” “We’re also capping recurrent charges, such as office management and gardening fees, at 42 days after a resident moves out.” Mr Anderson said the Government is also making it easier for retirement village residents to transition directly into aged care. “More than 60 percent of residents transition from villages directly into aged care accommodation. However, under the status quo, many can’t afford these costs if their unit does not sell quickly.” “Under the reforms, the operator will need to cover a portion of the estimated exit entitlement directly to the aged care provide, allowing a seamless transfer.” Retirement villages currently accommodate over 66,000 retired people, and this number is expected to double by 2033. New laws to deliver on the reforms will be introduced into the Parliament later this year.
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Retirement village residents to get greater fee transparency

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The Director of Consumer Affairs Victoria has started legal action against estate agency Colliers International (Victoria) for alleged underquoting and making misleading representations about property sale prices. 
It alleges that these breaches of Victoria’s estate agent and consumer laws occurred at various times between June 2017 and February 2018. 
The allegations are that Colliers made representations to potential property purchasers by: 
<ul>
<li>providing an indicative selling price that was less than the vendor was prepared to sell the property for</li>
<li>indicating that vendors were prepared to sell land at a price less than the estimated selling price in the engagement documents, and against vendors’ instructions. </li>
</ul>
The properties were at Navigators and Sarsfield.
CAV also allege that Colliers made representations to purchasers about the availability of certain permit approvals for land for a retirement village.
Consumer Affairs Victoria investigated Colliers after two separate complaints.
The complaints alleged that the company: 
<ul>
<li>was using the phrase ‘permit approved’ during the marketing of a development site, when no such approval existed, and </li>
<li>stated the estimated selling price on a property would be $1.8 million, but set a search price of $1.2 million in online advertisements - significantly below the asking price. </li>
</ul>
The matter is expected to be heard at the Supreme Court of Victoria later in 2020.
The watchdog alleges two Colliers agents marketed a prime Rosebud development site claiming it had planning approval for 64 retirement living units when it had no such thing.
The individual Colliers estate agents named in the writ are not defendants in the proceeding.
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Consumer Affairs Victoria starts legal action against estate agency Colliers International Victoria for alleged underquoting

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EXPERT OBSERVER
The COVID-19 pandemic has brought into sharp focus the need for connection to our local community and the health challenges of the retirement village model.
We know that, as we age, most people prefer to stay in their own homes and communities instead of moving to retirement villages. Some have gone so far as to say retirement villages have had their day. However, the reality is not quite that simple.
The challenge is that seniors are not well informed on what they could demand of the market. Planning schemes could also do more to create incentives for the changes we need now.
The challenges are complex and urgent as the global population grows and ages. Yet our housing supply reveals a bad case of the tail wagging the dog. Finely tuned financial models and development processes are driving the housing products available in the market.
What’s needed instead is adaptable housing and neighbourhoods to help people as they move through life’s stages.
<h2>Are the days of the retirement village numbered?</h2>
Many individuals and families struggle to find the right “fit” between the supported living options of retirement villages, independent living lifestyle villages and staying in the (often unsuitable) family home as their needs change.
Such villages offer viable products in the market as an important part of the housing mix. The models have some advantages in that they:
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are thoroughly costed and provide a good return for developers
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offer a range of living options to suit most budgets and level of care needs
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promise security, activities and a sense of community.
</li>
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<h2>Seniors are best placed to say what they need</h2>
However, <a href="http://research.usc.edu.au/vital/access/manager/Repository/usc:7983" target="_blank">our research</a> with seniors in south-east Queensland revealed a desire to “age in neighbourhood” and to have neighbourhoods with a mix of ages and building forms.
Planning schemes could drive this now by giving priority to, and providing incentives for, sustainable and accessible housing close to transport and other services.
We worked with more than 42 seniors in south-east Queensland to design a series of housing types. These were based on what they told us were important to them in a home and a neighbourhood.
The table below summarises the key features that they told us make a neighbourhood and a home a good place to live as they age.
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The resulting principles and housing types paint a vivid picture of what older people in a subtropical environment find appealing and supportive as they age.
Many participants preferred an accessible home on one level. Ideally, it should have two bedrooms and a study. This means it can easily be adapted to changing needs.
An essential component for our participants was to take advantage of the mild climate by having both private and shared outdoor spaces. Here they could socialise, relax and enjoy pleasant outlooks from the home. Cutting planning requirements for car parks by 50% could add more shared outdoor space and cut housing and living costs for residents.
Homes should be sustainably designed. This means they capture natural light and prevailing breezes for through ventilation, take into account privacy and noise considerations in higher-density areas, and have solar and rainwater harvesting systems to save resources and money.
Also important was a neighbourhood with a variety of green, clean and safe public open spaces. This includes flat, well-maintained and shaded walkways for exercise and easy access to shops, facilities and public transport.
We then showed how all these housing types could be incorporated into one Brisbane suburb, as the image below illustrates. This would mean seniors could remain in their neighbourhood in more suitable housing, reducing the stress of moving to unfamiliar surroundings.
<h2>How to make it happen</h2>
As with all complex challenges, everyone has a role to play in achieving these goals. However, local government planning reforms can act as a catalyst for the market to change and innovate.
Planning schemes could, for example, reduce application fees for developments that include accessible or universal design within 400-800 metres of key services, facilities and transport.
Carpark allocation could also be uncoupled from housing in locations close to transport and services. This would reduce the cost of housing and encourage greater used of active (cycling, walking, etc) and public transport.
This research clearly signals to local and state government, developers and small-scale property investors how houses, duplexes and mid-rise apartments could be put together in an age-friendly suburb. This transition to mixed-density infill development would support what we call “ageing in neighbourhood”.
Further, this research suggests planning “priority zones” could give the market the incentive to invest in the future-focused neighbourhood development it should be providing to keep people connected to their community.
This article was co-authored by Phil Smith, Associate Director of Deicke Richards at the time of publication of the research report. Phil Smith is Director of Gomango Architects.<img src="https://counter.theconversation.com/content/138729/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/caroline-osborne-90671" target="_blank">Caroline Osborne</a>, Postdoctoral Research Fellow, Office of Community Engagement, <a href="https://theconversation.com/institutions/university-of-the-sunshine-coast-1068" target="_blank">University of the Sunshine Coast</a> and <a href="https://theconversation.com/profiles/claudia-baldwin-248780" target="_blank">Claudia Baldwin</a>, Professor, Urban Design and Town Planning, Co-director, Sustainability Research Centre, <a href="https://theconversation.com/institutions/university-of-the-sunshine-coast-1068" target="_blank">University of the Sunshine Coast</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/ageing-in-neighbourhood-what-seniors-want-instead-of-retirement-villages-and-how-to-achieve-it-138729" target="_blank">original article</a>.
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What seniors want instead of retirement villages and how to achieve it

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Settlers Lifestyle, which runs a chain of retirement villages across Australia, has fallen into difficulty. It follows a default on its agreements with Investec Australia, which holds mortgages over its assets.
FTI Consulting's Joseph Hansell, Ian Frances and John Park have been appointed receivers and managers over The Settlers Group, which comprises Settlers Company, Settlers Operations and Forum Settlers.
Damien Hodgkinson of DEM Asia Group has been appointed voluntary administrator of The Settlers Group's 687 individual living units across Settlers venues in Queensland, New South Wales and Western Australia.
Settlers Rockhampton (QLD), Settlers Forest Lake (QLD), Settlers Ridge Estate (NSW), Settlers Lakeside (WA) and Settlers Ridgewood Rise (WA) (“the Facilities”) are all under receivership.
"The receivers and managers have taken control of the Settlers Group and intend to conduct the operations of the facilities on a business as usual basis, while a sale campaign for the whole group is conducted on a going concern basis," FTI Consulting advised.
"The receivers and managers intend to work with all stakeholders and Settlers Group service providers to ensure that there is no interruption in the delivery of services to the facilities operated by the Settlers Group or the residents.
"The Receivers and Managers, intend to engage directly with the respective managers at each of the Facilities in order to explain the nature and the expected outcome of the appointment.
"At the same time, the Receivers and Managers will also be available to meet with the residents at each of the facilities in order to explain the nature of the processes that are usually undertaken by a Receiver and Manager as part of a sale.
FTI suggest it is too early to provide an estimate of the amount of time it will take to complete the receivership.
"Timing of this process is ultimately determined by how long it takes to bring the properties to market, conduct an orderly marketing campaign and then to assess and decide upon the final offers that have been submitted.
"Regardless, the receivers and managers will ensure that residents are kept informed during the sale process."
It is understood the receivers will look to sell all five retirement villages after Settlers Lifestyle was unable to fund mandatory buybacks.
There are new mandatory buy-back rules in Queensland, where the group operates two of its five retirement villages.
Hodgkinson noted recent changes to Queensland legislation require retirement village operators to buy back units from residents if they remain unsold for 18 months.
It triggered an insolvency event at Lifestyle’s Rockhampton village. 
Settlers Lifestyle is owned by a Singapore-domiciled offshore investment fund managed by global fund manager Forum Partners headed by Andrew Faulk.
Forum Partners acquired the five retirement communities from listed retirement village operator Ingenia in 2016 for $55 million.
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Settlers Lifestyle retirement villages falls in to administration

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GUEST OBSERVATION
Prime Minister Scott Morrison announced a Royal Commission into Aged Care Quality and Safety on Sunday, responding to concerns about the sector one day before an ABC Four Corners program which was to air them.
Aged care is where the challenges of population ageing are most apparent and where policy choices have direct impact on the lives of Australians.
So, it’s not surprising that the system is under increasing scrutiny. Various reviews have looked at different aspects of aged care since 2011 when major reforms were first ushered in, including into quality, public financing, workforce, and the overall progress of reforms.
The outcomes all point to similar conclusions. Responding to the needs of older, often vulnerable, Australians is an extremely complex business. But it is also one in which making money is tough. The danger is that a combination of cost pressures, profit incentives, and inadequate oversight encourage or force providers to cut corners.
How providers make money
Most funding for aged care comes from government. Direct government expenditure on the overall system was about A$17 billion in 2016-17, with A$12 billion going to residential care.
The users of residential care topped this up with A$4.5 billion of their own money, via regulated fees that are capped for users who pass a generous means test.
But costs of care are high. Providers spend more than A$11 billion on staff, yet those staff aren’t highly paid. This is in part because they are mainly females, who face an unremitting gender pay gap.
The pause that hurt
The Aged Care Financing Authority reports that profits are climbing over the long term but are precarious year-to-year.
The residential industry saw profits fall by 4% to 5% in 2016-17, partly because of a pause and then a scaling back of the indexation of government funding.
Although one quarter of residential care providers made losses in 2016-17, two thirds continued to record profits.
Bigger centres
The tighter funding was justified as a measure to drive efficiency, but it provided further impetus to the longer term trend of big providers to merging with or taking over the small ones. While the number of care places has climbed 8% in four years, the number of providers has shrunk 13%.
One reason why unprofitable providers remain in the market is because they are, by definition, not-for-profit. So the system relies heavily on good will. While still dominant, they have lost share to private, for-profit providers, some of which have the advantage of economies of scale or capital ownership structures that allow them to pay less tax.
While some of those listed on the Australian Securities Exchange saw drops in their share prices in recent years, the sharp declines when the Royal Commission was announced may reflect investor concern about the risk of greater scrutiny of the relationship between their profits and quality of care.
Uncertain quality
It will be open to the Royal Commission to examine how these trends are affecting the quality of care.
The government influences the quality of care in other ways that might attract the interest of the Royal Commission. It sets standards and helps design the incentives that discipline the market.
The standards cover indicators including management, the health and personal care of residents, resident lifestyle, and resident safety. They have been enforced by initial accreditation, subsequent re-accreditation, self-reporting, the examination of complaints and (until recently) pre-announced visits.
In 2017 the government announced a move to unannounced visits after evidence suggesting that some were “staged” in order to present the centre “in the best possible light”.
In July 2018 the government began charging for unannounced visits, raising what it expects to be A$10 million a year.
It’s hard to switch
Consumers can themselves apply market pressure on poor performers, and it is increasingly possible through a move to so-called consumer directed care, where care recipients or their carers are given a budget and the ability to decide how to spend it. If one provider turns out to deliver poor services, they can switch and spend their money elsewhere.
But the transaction cost of switching can be high. The process isn’t easy for users experiencing cognitive decline and there’s not always another centre or service to switch to.
Next steps
The Royal Commission will expose much. For providers, it will be an opportunity to examine their operations to ensure that efficiencies and profits don’t come at the cost of quality. For government, it will be a chance to examine how its funding mechanism, regulations, enforcement and market design are working out in practice.<img src="https://counter.theconversation.com/content/103339/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Rafal Chomik, Senior Research Fellow, ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/its-hard-to-make-money-in-aged-care-and-thats-part-of-the-problem-103339" target="_blank">original article</a>.
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It’s hard to make money in aged care, and that’s part of the problem: Rafal Chomik

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GUEST OBSERVATION
It is no secret people are living longer, thanks to advances in medical technology. Futurist Ray Kurzweil predicts we are approaching a point of breaking even – where for every year lived, science can extend lifespans by at least that much. And more than 80% of Kurzweil’s predictions have so far proved correct.
But length of life and quality of life are not the same thing. For good quality of life as one ages, there must be optimal retirement options. The default is to stay in one’s current home for as long as possible, or downsize. Some will settle into the quiet life of a retirement village on the urban fringes.
But a growing number of retirees who are leading a more active retirement, perhaps still working part-time, want to live closer to the bright lights of the city. It is here that the next generation of retirement living is becoming established in cities around Australia, New Zealand, Europe and the US.
Driving the trend are well-heeled baby boomers (those born between 1946 and 1964) who have been using technology at home and work for years. For some, technology has been integral to their lives. And it seems it might be integral to the future of retirement living.
Vertical retirement communities
The chair of the NSW inquiry into retirement villages, Kathryn Greiner, recently recommended integrating designated seniors’ apartments in medium or high-rise residential developments where people of all ages live. Experts have said such retirement communities are the “way of the future”.
But the future is already here, as greater numbers of vertical retirement communities in high-rise apartment buildings are being built in inner-urban areas around Australia. They offer high levels of luxury with ready access to the kinds of amenities inner-city dwellers have grown accustomed to.
High-rise retirement villages would typically be equipped with various smart technologies that connect with the larger technological infrastructure of the city.
Similar to luxury hotel suites, residents would have a spectrum of in-house services and entertainment options presented via internet-connected smart TVs. Multimedia suites would be there for augmented or virtual reality experiences – travel and education being among them. In-house cinemas would host movie nights.
Health care
The way we’re heading, technology-enabled, proactive health management will likely be built into the infrastructure of these retirement villages. It will allow people to stay healthy and live independently at an advanced age, forestalling the time when a move to aged care becomes necessary.
The health-maintenance technology available today means retirees hardly need to leave home for a checkup. Telehealth gives on-demand access to doctors via the internet. Visiting nurses have their role in looking after the elderly at home.
Then there are the dozens of smartphone apps that monitor vital signs, some of which send timely warnings before something becomes a problem.
And while high-rise living may not offer the same access to the outdoors for walking and exercise, technology has other options.
“Exergames” – video games that enable physical activity – are a segment of the computer game industry known to be beneficial to people of all ages, including the elderly. Exergames lend themselves well to vertical communities by not needing much space. They are played either alone or with friends in self-contained virtual environments.
Apart from the physical benefits of exercise, exergames have also been shown to improve mental alertness, balance and coordination, all of which contributes to fewer injuries common to the elderly, such as fractured hips from falling.
Good help is not hard to find now with assistive technologies like Google’s Duplex. These personal assistants fit right into the high-tech home and allow people, wherever they live, to stay independent for longer.
The assistant can keep your diary, make appointments over the phone, buy flowers and have them delivered, turn on the lights, call a taxi and more. Autonomy aids like this could delay the transition to aged care.
A win-win
High-rise apartments are a thorny issue in suburban neighbourhoods, regardless of who is living in them. There are already some objections to high-rise aged-care facilities. But these mainly come from existing low-rise residents who are not happy to have any high-rise buildings in their neighbourhood.
Some are concerned that high-rise communities will lead to social isolation. Traffic congestion is also a concern.
When managed well in an architectural and town planning sense, vertical communities offer high-quality living while occupying a smaller urban footprint than a hundred detached dwellings. They can help reverse the urban sprawl of Australian cities, which are among the largest and least densely settled in the world. We love our big suburban houses, but they do consume vast tracts of countryside.
<img src="https://counter.theconversation.com/content/96916/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">People want to live out their days in the freedom of their own home, not in an institution, no matter how benevolent. And it’s in the national interest to relieve pressure on the public health system. Emerging health-optimising technology and vertical communities can enable this. It’s a win-win.
David Tuffley, Senior Lecturer in Applied Ethics and Socio-Technical Studies, School of ICT., Griffith University
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/vertical-retirement-villages-are-on-the-rise-and-theyre-high-tech-too-96916" target="_blank">original article</a>.
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Vertical retirement villages are on the rise, and they're high-tech too

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GUEST OBSERVER
While you may think signing a retirement village contract is similar to buying a house or apartment, it isn’t.
Retirement village contracts resemble insurance contracts more than purchase agreements, only they aren’t regulated like insurance products. 
The lack of regulation increases the risk for retirees. They face considerable delays in receiving their payments when they leave, costs due to the delay, and the potential loss of all payment from companies that don’t need to meet the financial standards of an insurance company.
Most retirement village contracts provide the consumer with a combination of the right to reside in the retirement village (until death, incapacity for independent living, or voluntarily relocation) and an “exit payment” upon leaving. As both the amount and timing of this payment depends on the resident’s death or ill health, the payment is a de facto insurance payout.
This makes the retirement village contract a combination of the right to reside and a de facto insurance policy. But the insurance policy comes from companies that wouldn’t normally be allowed to sell insurance.
Retirement villages are mostly small private companies or not-for-profit organisations. This means they aren’t required to publish their annual financial statements, hold reserves, or have reinsurance arrangements like an insurance company. The consumer can’t be confident that the retirement village is financially healthy and able to pay out the exit fee, due to the absence of information about their accounts and financial condition. 
<h2>Fees and more fees</h2>
There is a great variation in the structure of the fees that retirement villages charge – entry fees, ongoing fees and a so-called “<a href="https://www.fairtrading.nsw.gov.au/Factsheet_print/Tenants_and_home_owners/Retirement_villages/Leaving_a_village/_Departure_fees.pdf">deferred management fee</a>”, which is an amount taken out of the money refunded to departing residents.
These fees <a href="https://www.retirementliving.org.au/industry/services/census/">can be substantial</a> – the entry fee alone is often comparable with the cost of buying an apartment. Although the amount varies by location, one operator told a <a href="https://www.propertyobserver.com.au/https://www.parliament.vic.gov.au/lsic/article/2972">Victorian parliamentary inquiry</a> the entry fee was equivalent to 80% of the cost of a house nearby.
A retirement village contract might have an entry fee of A$1 million, a deferred management fee of 6% of the entry fee per year of residence, and a maintenance fee of A$500 per month. 
For a contract with a A$1 million entry fee, after five or more years of residence, the deferred management fee is A$300,000, so the exit payment is A$700,000. But the deferred management fee can vary greatly. It may be 10% per year for three years, or 3% for 10 years etc.
The exit payment can also include some share of the resale value of the apartment. But the retirement village needs to be able to pay out this exit payment.
<h2>The need for proper regulation</h2>
The assets held by retirement villages are almost all invested in real estate. This is risky, as they aren’t diversified and their assets can’t be easily turned into cash. 
When a retirement village has to pay a departing resident their exit payment it may take a long time to sell their apartment, which could involve a loss on resale. This can also lead to delays in receiving exit payments.
After signing their retirement village contract, residents are also in a weaker bargaining position than a traditional tenant in a normal pay-as-you-go rental arrangement. This is because residents have already paid their rent in advance for the rest of their life, and it usually costs a lot of money to get out of these contracts. 
In some retirement village contracts the resident may be forced to spend a lot of money on renovations – such as for a new bathroom and kitchen – so that the apartment can be sold and they can get the exit payment. 
This issue is compounded by the complexity of the contracts, which can be hard <a href="https://www.propertyobserver.com.au/https://www.parliament.vic.gov.au/lsic/article/2972">for both consumers and financial advisers</a> to understand.
This creates substantial risk for consumers, and the lack of a requirement to publish financial statements and related information makes it very difficult to assess the financial soundness of a retirement village operator.
If retirement village contracts are in fact insurance agreements, then they should be regulated differently – by the Australian Prudential Regulatory Authority and not by state governments, as is now the case.
If retirement villages were properly regulated then consumers would be better protected from failure of operators and better protected from delays and capital losses when they get their exit payment.
Timothy Kyng is Senior Lecturer, Department of Applied Finance and Actuarial Studies, Macquarie University and author for The Conversation. He can be <a href="https://theconversation.com/profiles/timothy-kyng-386308" target="_blank">contacted here</a>.
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Why retirement village contracts need to be regulated like insurance

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A retirement estate in Bowral precinct in NSW’s Southern Highlands has sold for an undisclosed sum.
The <a href="https://www.realcommercial.com.au/property-land+development-nsw-burradoo-502380918" target="_blank">510 Mossvale Road, Burradoo</a> site has an area of 3.4 hectare and is located in the  residential land sub-division. 
The Karrara Retirement Estate, currently an over 55’s strata estate, is at the corner of Moss Vale &amp; Links Road, Bowral. 
It has been partially developed, with Stage 1 complete. Stage 2 has commenced. 
The median house price is $950,000, according to selling agency Colliers International.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/06/Bowral1.jpg" alt="">
The village currently comprises two lots, one containing a newly restored heritage home which is the main community facility within the village. 
It has an indoor pool, snooker table and several kitchenettes and community facilities. The second lot comprises nine newly built homes along with 46 additional serviced sites as well as some earthworks for stage 2 which is now ready for construction.
The selling agents were Peter Seeto and Michael Sullivan of Colliers.
 
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