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Developers spark trend in aged care permits amid growing downsizer market

Property Markets / Planning, Zoning, Infrastructure

Australia

Nov 14 2018

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Developers are sparking a surge in permit amendments for aged care projects, turning their backs on residential developments and shifting their focus to “independent living”, a hybrid between the aged care sector and traditional apartments, in a fight for Melbourne’s ever-expanding downsizer market.

With Australia’s baby boomers moving into their next phase of life and medical advancements increasing the average life expectancy, there is a growing demand for retirement living that is already outpacing supply.

According to Mcrindle Research, 3.7 million Australians (15 per cent of the population) were aged 65 and over in 2016, a number that is set to double by 2057. The research also indicates that in 2044 there will be 1.2 million more people aged over 85 than there are today, and the average older Australian will live five years longer.

The government’s reaction to this surge in the over 65 demographic has been to increase its investment in the aged care sector, spending approximately $17 billion in the 16/17 financial year, of which 69 per cent went towards residential aged care.

This growth and government investment is in stark contrast to the current residential market, which has been afflicted by unpredictable buyer activity, tightened bank lending and government restrictions that has seen demand softening for traditional apartments in recent months.

Marshall White Projects director Leonard Teplin said the last few months had seen an unprecedented number of developers seek to amend existing planning permits for independent living uses, both to navigate around the uncertain residential market and tap into the growing demand from the downsizer market.

“It’s no secret the past few years have seen developers adjust their focus to downsizers and seen incredible success - independent living is the next step.”

“Developers are seeing an opportunity to tap into this demand for over 55s, which is a market that’s emerged as a counter-cyclical sector to traditional apartments."

“Rather than sit on sites for the next market cycle they are seeking amendments to their existing permits so they can take advantage of this new trend.”

Marshall White Projects is betting big on this new market with the launch of its new arm - Marshall White Living, commencing with its first project, The Grace at Albert Park Lake, a luxury high rise close to the CBD available exclusively to those over 55.

Reflecting the ethos that a Marshall White client is a client for life, this service will address the unique needs of buyers who are advancing to the next phase of downsizing.

“Australia’s over 65 population is growing at an exponential rate, as is the number of people moving into aged care, which has increased by 31 per cent in the past 10 years,” said Teplin.

“Marshall White Living caters to those that are looking to downsize and find a home for life, but offers more freedom and flexibility than a traditional aged care environment.“

“The Grace offers architectural excellence in a highly sought-after inner-city locale while each aspect of the design, including intuitive internal functionality and cutting-edge technology, has been created to offer optimal safety and comfort."

“These premium independent living environments enable our clients to enjoy life, immersed in a rich community of like-minded people.”

Local architecture practice CHT Architects has been pioneering the trend in Australia; the company specialises in aged care and retirement living, while also working across some of the country’s most prominent residential apartments.

Director David Carabott says he is working with a number of developers that are amending their residential permits to shift the focus onto buyers looking for independent living.

“The increasing acceptance of apartment living among the older demographic has paved the way for retirement living to be repositioned as a modern vertical village, rather than the traditional horizontal-style village where residents are often isolated from their families in the outer suburbs,” said Carabott.

“This new iteration, independent living, caters to a broader audience of downsizers who want the added levels of security, comfort and convenience of retirement living but still want to live in the inner suburbs where they’ve spent most of their lives."

“Developers can make some easy-to-implement changes in the planning process of their projects to make them adaptable to cater to this buyer, and consequently find themselves filling a big gap in the market."

“It’s relatively unprecedented at the moment, which leaves a unique opportunity for developers to get their product out there first and win big. Developers that do this now will set themselves up to be the market leaders in Australia’s fastest-growing development sector.”

Director at Springwood Living Group Matthew Chun says independent living offers the best of both worlds for Australia’s older generation, who can enjoy all the advantages of traditional apartment living with additional lifestyle and financial benefits.

“With residential house prices rising at alarming rates, independent living is a wise financial solution for the over 65s,” said Chun.

“Typically it allows residents to enter the complex at 70 per cent of the existing median house price in the same location, which gives them the opportunity to sell their house and access significant equity in their homes to assist in enjoying their retirement years.

“Independent living also offers significantly more amenities and lifestyle luxuries than standard residential, such as a clubhouse where residents can host group events, billiard
rooms, communal gardens, library, etc.

“On site management provides an additional layer of security and assistance with collecting deliveries, arranging events and helping with tasks related to their home.

“The combination of a strong demographic shift towards this buyer, the affordability of the product and the lack of supply make this sector extremely attractive to developers.”

About Marshall White Projects

Marshall White Projects has rapidly become one of Melbourne’s leading project marketers of residential developments. Collaborating with clients to build comprehensive selling strategies that produce the optimum value of each development, Marshall White Projects maximises the gross yield and minimises the number of days on market. Its unmatched, complete and premium service encompasses everything from site selection and negotiation, product design and development, application of current market research and project management to ensure a successful delivery.

Currently Australia’s largest privately-owned residential sales and marketing agency, Marshall White Projects has managed thousands of successful residential sales across Melbourne.

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