As the collapse of some of the biggest names in building shutters projects across the country, retirement living construction looks safer than ever.
The latest survey from Australia’s Property Council revealed that despite widespread industry turmoil, the nation’s retirement living industry forecasts strong confidence around construction activity over the coming 12 months.
This confidence in retirement construction is at its highest since March 2022, far outperforming other sub-sectors, and predicted to be greater than residential, office, retail, and industrial combined.
The positive results are a surprising bright spot in the construction industry, as other sectors feeling the pressure of soaring material prices and worsening labour shortages have been forced to close their doors.
According to Australian Securities and Investments Commission data, at least 660 construction companies have gone bust in the first three months of the 2023-2024 financial year – leaving behind hundreds of abandoned worksites and millions owed to tradies, subcontractors, creditors and homeowners.
Retirement Living Council Executive Director Daniel Gannon said while the positive sentiment was an “encouraging sign”, there is still plenty more left to do if the country is going to keep pace with the housing needs of its ageing population.
“With the number of Australians over the age of 75 set to increase from two million to 3.4 million by 2040, more age-friendly housing must be supported by all levels of government,” Mr Gannon said.
“There is a planned supply pipeline of 18,000 retirement dwellings across Australia, which, if successfully delivered, could reduce the national housing gap by approximately 18 per cent to 2030.
“However, if industry wants to keep pace with current market penetration of over-75s, we will need an additional 49,000 units over and above what is currently in the pipeline.
“This could see a 67 per cent reduction in the national housing shortage.”
Challenges still loom large over the sector
While confidence might remain high, the retirement construction sector still has to contend with several hurdles that could pull the handbrake on this much-needed housing supply.
Mr Gannon said that in addition to the widespread challenges around construction costs and labour shortages, the sector also faced legislative reform that would “tighten the supply clamp”.
“The other variable for the retirement living sector is legislative reform, which is taking place in every corner of the country and impacting two-thirds of Australia’s retirement living markets,” said Mr Gannon.
“If these reforms make it harder for operators to build and operate age-friendly communities, it could tighten the supply clamp at a time when confidence remains high, construction activity has a strong pipeline, and when the nation needs housing.”
Mr Gannon said governments need to better understand that retirement villages across the country save Australia billions of dollars every year as the population continues to age.
“They achieve this through better-designed homes that minimise trips and falls, which means residents can experience fewer visits to the GP, shorter hospital stays and delayed entry to aged care,” he said.
“All of this reduced interaction with doctors and hospitals releases capacity back into health systems for those who need it most, when they need it most.”
