Living Well

AUSTRALIAN PROPERTY INSIGHTS

LIVING WELL

OUTLOOK & RISKS

STRUCTURAL DEMAND IS LOCKED IN; DELIVERY REMAINS THE CHALLENGE The future for Australia’s Retirement Living sector is underpinned by demographic certainty. However, the national development pipeline has contracted sharply, and near-term delivery remains well below what’s required to maintain market penetration. This shortfall supports performance in existing stock – through high occupancy and pricing resilience – but it also highlights a gap between what the market needs and what the sector can viably deliver today.

AS THE SECTOR MATURES IT WILL BRING BIFURCATION Institutional capital is accelerating platform consolidation – but investors are now seeking more than just demographic alignment; ESG integration, reporting transparency, resident satisfaction, and governance maturity are all increasingly in focus. The result is a sector in transition, with growing separation between institutional-grade platforms and legacy portfolios that may struggle to keep pace.

POLICY AND REGULATION: INCREASING PROTECTION AND TRANSPARENCY

ECONOMIC HEADWINDS ARE RE-SHAPING FEASIBILITY AND CASHFLOWS

Regulatory reform across most states has introduced clearer rules around exit entitlements, fee transparency, and resident rights. While these changes are broadly positive for the sector’s reputation, they also require operational sophistication and financial flexibility. Beyond the demographic and operational fundamentals, the sector benefits from an unusually strong policy environment. Retirement Living is one of the few real estate sectors to enjoy consistent support from both major parties, with Labor and Liberal governments alike recognising its role in alleviating pressure on Aged Care, improving social outcomes for seniors, and unlocking underutilised housing through downsizing.

High construction costs and challenging financing conditions are constraining development activity, particularly in metro areas where demand is highest but land and build costs are hardest to manage. While build cost growth remains high, most experts expect stabilisation from recent rates of increase, followed by gradual improvement over 2026-2028. On the financing front, development debt remains costly but will improve as the rate-cutting cycle continues. There is good appetite to lend to entities with strong track records in the sector. Operators are also diversifying the types of products available to consumers – offering prepaid or refundable structures to reduce volatility and appeal to a broader financial base.

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CUSHMAN & WAKEFIELD