Baby boomers looking to live the dream are fuelling major changes in the housing retirement market.
Property figures say boomers are shying away from staid, traditional retirement villages and opting for stand-alone and low-maintenance single-storey homes surrounded by clubs and sporting/recreational facilities.
Innovative developers are creating value-added residential communities in response to the increased demand from the immediate post-World War Two generation (aged 48 to 70) for retirement accommodation that gives them flexibility, close-at-hand amenities and independence.
These developers are delivering low-maintenance, lock-and-leave housing for active-minded boomers who want to downsize after selling the family home, and use any remaining cash from the sale to travel and chase their dreams.
Lifestyle Communities’ managing director James Kelly says new age retirement-style communities with amenities such as residents’ clubs, tennis courts and bowling greens are starting to “gain traction” as the first baby boomers hit 70.
He describes the age wave of baby boomers as a “tsunami” which will lead to a major expansion of this sector.
“We are certainly starting to see demand increase for this type of product,” says Mr Kelly, whose company develops residential communities in outer suburban Melbourne and regional Victoria.
“They (the boomers) are different from previous generations in that they want to free up cash so they can spend and enjoy it.
“They say to us that they don’t want a typical retirement village. To date the market has not been catering to this generation. They have been building for an older generation. That generation were very much cash conservers. Baby boomers want to spend.”
Mr Kelly says the boomers are opting for compact and contemporary homes with “all the bells and whistles” such as the type his company produces, which offer 80sqm to 120sqm of living (two bedrooms or two bedrooms and a study) space.
“Our largest market is people in the outer suburbs who have been living in their own home for 20 to 30 years and they have equity in their homes,” he says.
“They are looking to down-size and put some money in the bank. Fifty per cent of Australians have less than $450,000 in equity in their homes. A home in our communities is priced between $260,000 and $350,000.”
Mr Kelly says his company’s homes also differ from many traditional retirement residences in that the occupants are living in their own homes and leasing the land those homes are on for 90 years.
“In a traditional retirement village often you don’t own the home,” he says. “You have a licence to occupy. With our model you get to control your own destiny. They can still sell their home – although not the land – on the open market.”
A weekly rental ($180 for couples and $160 for singles) covers the lease of the land and use of the facilities such as the residents’ club and tennis courts.
Villawood Properties executive director Rory Costelloe believes there is a “definite demand for lock-and-leave housing”.
“They (the baby boomers) are looking for somewhere where they can park their caravan or boat,” he says.
Mr Costelloe, whose company constructs residential housing estates along the eastern seaboard, created a small and exclusive over-55s village at his Alamanda development in suburban Point Cook, south west of Melbourne, five years ago with mixed results.
“It was not embraced by the market then and was probably ahead of its time,” he says.
“But those who did buy there love the location and the concept. They had their own community garden and park and are now close to the residents’ club and other services such as the mixed-use facility with its restaurant, café, supermarket and medical centre.”
The Villawood chief says he plans to develop other over-55 precincts along similar lines at various estates around Victoria including Armstrong at Geelong.
“Buyers at our estates will be able to buy house and land combinations in an over-55s setting,” Mr Costelloe says. “Among the advantages of this are that they will be surrounded like-minded people and will not have noisy neighbours.”