FY2025 Budget: Retirement homes can slash housing shortfall

The Albanese Government is being urged to cut its expected 200,000 housing shortfall by a third by adding retirement homes to its ambitious target for 1.2m new builds by 2029.

Retirement communities like this Aveo complex help save government almost $1 billion a year by delaying entry of residents into taxpayer-funded aged care.

The Albanese Government is being urged to cut its expected 200,000 housing shortfall by a third by adding retirement homes to its ambitious target for 1.2m new builds by 2029.

Property Council of Australia Retirement Living Council executive director Daniel Gannon called for the sector’s inclusion in the Housing Australia Future Fund’s 1.2m target to both add to the national housing tally and stimulate supply across states for retirees.

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The number of people aged over 75 is set to increase from two million to 3.4 million by 2040 in Australia.

The Australian Bureau of Statistics recognises retirement units as official dwellings, he said, with the demographic among the fastest growing groups in the country.

“Between now and 2030, the retirement industry requires 67,000 homes to be built to meet existing levels of demand from older Australians. Of this amount, only 18,000 are currently planned. These 67,000 homes would represent six per cent of the 1.2 million new homes target, meaning retirement communities can help the government solve Australia’s housing supply problem.”

Mr Gannon said they were not asking for cash but official recognition in the target.

“If we can do that, which of course then motivates and incentivises the state governments to get on board, then we think that we can unleash more homes. Given there are 300,000 more over 75-year-olds by 2040, given there’s more than 200,000 over 75-year-olds living in what are presumed to be oversized dwellings, we think it’s a win-win for consumers and the government.”

He said the RLC was lobbying state governments “to identify council areas that were undersupplied with retirement communities to establish minimum land allocations in greenfield master plan settings for retirement – in much the same way we do for social and affordable housing”.

Executive director of the Retirement Living Council Daniel Gannon.

“We think that the government’s got to get into this sooner or later given the states are ageing, the country is ageing.”

The Housing Industry Association forecast a 200,000 shortfall of the federal 1.2m housing target unless there was major planning reform, labour supply boost and lower taxes on new builds.

“Given the number of people aged over 75 is set to increase from two million to 3.4 million by 2040, government decision-making needs to facilitate and stimulate more supply – not hamper it,” Mr Gannon said.

“Recently released ABS national population figures found that with an annual growth rate of 6.6 per cent, the 75–79-year-old age group significantly out paces all other demographic cohorts.”

The 75–79-year-old age group is growing annually by 6.6 per cent, significantly outpacing other demographic breakdowns.

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The retirement living sector currently provides purpose designed homes for 250,000 older Australians, effectively operating at full capacity.

The RLC estimates “retirement communities are the sleeping giant of Australia’s health and housing landscape” saving government almost $1 billion a year by delaying entry of residents into taxpayer funded aged care facilities.

Among other measures the RLC has called for in the federal budget was allowing retirees “deeper access to Commonwealth Rental Assistance”, removal of inconsistencies around the Home Equity Access Scheme and exemption of a portion of home sale proceeds in the age pension asset test to cut down financial disincentives for those considering downsizing from the family home.

The national budget is set to be handed down by federal treasurer Jim Chalmers on Tuesday May 14, 2024.

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