Last issue we spent considerable time covering the reputational damage done to the retirement village sector by the failure of the aged care home attached to the Earle Haven Retirement Village on the Gold Coast – the aged care home is also called the Earle Haven Retirement Village(!).
In summary, there has been little news over the last two weeks as the village operator and the aged care operator have both got lawyers involved, so everyone is keeping their heads down.
We do know they are being referred to the Royal Commission into Aged Care – so more will become public.
Meanwhile on our DCM website villages.com.au, new sales enquiry for all retirement villages south of Brisbane is down by at least 10% compared to the rest of the country. Not surprising.
Earle Haven sales will be particularly hit. It’s a big village with 426 villas and 110 serviced apartments (total 536). Short-term sales are going to be tough.
With the 20% serviced apartments the average occupancy will be eight years, which means close to 70 homes will become vacant each year or 1.3 every week.
QLD has an 18 months buyback rule which could be challenging for the owner. If you can only sell half those vacancies over 18 months that will build to 100 homes the owner will have to start buying. They currently stand at about $250,000 each, so that equates to $25 million cash will be required – and growing.
For us in the village sector, this is why fast sales are so important – which is why ‘trust’ in retirement villages is so important – for our residents and for the operator.
All the research shows the Village Manager is pivotal in establishing and maintaining local ‘trust’, and sales.