URGENT UPDATE: The latest Retirement Living Census reveals a staggering surge in retirement village prices, with the average cost of a two-bedroom independent living unit skyrocketing 16.5% in 2024. Just a year ago, in December 2023, these units were priced at $559,000. By December 2024, that figure has jumped to $651,000, reflecting an increase of nearly $100,000 in just 12 months.
This dramatic rise is alarming for potential retirees and families seeking affordable housing options. With national vacancy rates plummeting to just 4%, and as low as 2% in Western Australia, waiting lists have become the norm for retirement living. The tight supply is exacerbated by a growing trend of luxury developments, making affordable options increasingly scarce.
In a stark example of the rising market, a two-bedroom apartment at St Clare in Kew recently sold for an astonishing $2.75 million, while at The Watermark Residences in Sydney, two-bedroom units are fetching prices around $3 million. With only 3.9% of village homes priced low enough to qualify for Commonwealth rent assistance—meaning a purchase price of $258,000 or less—the options for budget-conscious buyers have dwindled.
Despite these steep increases, retirement villages continue to present a more affordable alternative compared to the broader housing market. On average, an independent living unit costs 59% of the median house price in the same suburb. In Sydney metro, these units are the cheapest at 48% of the median house price, while Tasmania reports the highest at 85%.
However, prospective buyers must also consider additional costs. The average exit fee remains stable at 33%, with 75% of these fees calculated based on the purchase price, impacting long-term financial planning for retirees.
As the housing market continues to evolve, the implications of these rising costs will be felt widely, impacting not just the retirees looking for affordable living options, but also the families and individuals who support them. The situation is developing rapidly, and those interested in retirement living should act quickly and stay informed about the changing landscape.
