Retirement villages are saving taxpayers almost $1 billion a year and could help solve our housing crisis. So why are we not building more of them?
That’s the conclusion of a new report, The Better Housing for Better Health report launched on Saturday by the Retirement Living Council.
The report outlined ways that the industry contributes to the country’s housing supply and healthcare, including by delaying the entry of older residents into taxpayer-funded aged care facilities, to the tune, currently, of 250,000 people living in age-friendly communities across Australia.
“Australia is currently experiencing a demographic shift, propelled by an ageing population,” the report said. And its focus has shifted from a real estate play to “a sector that is providing care, wellbeing and support services”.
“This brings risks and opportunities for industry, consumers and governments, in particular around affordability, supply, care and fiscal relief.”
According to the report, more than 1.4 million older Australians live in dwellings that are oversized for their needs. Creating more supply of affordable housing for ageing Australians will reduce the pressure on the housing crisis by making more homes available as returning stock to the general market.
Daniel Gannon, RLC’s executive director said that the retirement living industry is often confused with the aged care industry, but this new first-of-its-kind report will send a strong message to the governments about the values of the sector.
He said that the affordability the sector provides in an otherwise unaffordable housing market is why its residents live healthier lives.
“Retirement villages across Australia are already saving the government a billion dollars a year, by delaying residents’ entry into aged care, and quite simply, we need more of them,” Gannon said.
“People who live in retirement communities are less lonely and less depressed than older Australians who live independently, because retirement communities encourage physical wellbeing and social interaction – which all translates to economic benefits for governments.
“For the first time, this report shows how our sector has actual solutions to Australia’s two biggest worrying trends – our housing crisis and our rapidly ageing population.”
Key findings include:
- if the volume of retirement dwellings remains stable in 2023, the government could save about $350 million a year by delaying the entry of 8500 people into aged care by a year
- if the volume of retirement dwelling continues to grow consistently until 2030, national expenditure on aged care may reduce by $945 million annually by delaying the entry of 11,600 people into residential aged care by two years.
- residents whointeract less frequently with healthcare systems are:
- 20 per cent less likely to require hospitalisation after first nine months of entry and 28 per cent less likely to need hospitalistion from the pre-entry levels after 18 months of residency
- amongst the 14,000 annual hospitalisations that could be avoided
- there are currently 18,000 retirement dwellings planned, which could reduce the housing gap by 18 per cent between 2023 and 2030 by reducing current supply shortages and freeing up existing housing stock for new generations
- by developing 49,000 more retirement homes, housing supply gap could be reduced by up to 67 per cent between 2023 and 2030
- the retirement sector supports almost 30,000 jobs every year
Residents of retirement communities are also:
- 15 per cent more physically active
- 41 per cent happier and both physically and mentally healthier
- Five times more socially active
- two times as likely to catch up with friends and family
- have reduced levels of depression and loneliness, which saves $4.7 million in healthcare costs for governments
According to Gannon, while there are currently two million Australians aged over 75, the cohort will increase to 3.4 million by 2040.
“This population shift will have socio-economic impacts on Australia, including the housing supply shortage and the pressure on an already struggling residential aged care sector,” Gannon said.
“Age-friendly housing can reduce interactions between older Australians, GPs and hospitals, which releases capacity back into health systems for those who need it most when they need it most.
“Better housing that enables better health outcomes for ageing Australians is imperative, and the bonus is that it’s good for governments too,” he said.