As Australia’s population ages and baby boomers retire, the demand for reasonable retirement living options is greater than ever.
Retirement villages are specially designed to meet the accommodation, social and recreational needs of over 55s – for many, they offer the picture-perfect answer for a restful and pleasant senior lifestyle, boasting state-of-the-art services, inviting communities and *seemingly* reasonable pricing plans.
Nevertheless, as part of its four-point plan to develop retirement village living, the NSW Government commissioned an inquiry into the NSW retirement village sector in late 2017, with determination to assess the protections offered to residents and monitor whether villages are functioning in compliance with current laws.
Topping the list of compliance concerns is the lack of clearness in village contracts and fee settlements.
One of the least understood concerns for prospective residents when purchasing in a retirement village is the Deferred Management Fee, or ‘DMF’.
Most retirees don’t completely understand just how much departure fees can add up to be, and get a huge shock when they find out. Contracts are long and hard to understand, and many residents undergo a great deal of pressure when they are ready to sell and find out that a hefty portion of their profits is not theirs after all. They are often uninformed as to the consequences of this condition when signing contracts, and undergo a large financial sting.
On the other hand, property giant Stockland is conveying change to the retirement village horizon.
Aspire by Stockland describes itself as a “new kind of living for the over 55s”.
Rather than the usual retirement village contracts which see residents pay up entry fees of between 65-70 percent of the usual property price in the area, followed by an exit fee after a lifetime lease, Aspire in Sydney’s Marsden Park will see residents pay for and possess 100% of their property.
This is a huge step in the right direction for the industry, however, Stockland CEO Stephen Bull admits a national rollout will incur legislative resistance. “Because this product doesn’t fall under the Retirement Living Act, we need to get planning support,” he said. Nevertheless, this hopefully indicates an optimistic change in the face of retirement living.
Written by: Beth Hampton