What is costing retirement villages $1.3Bn a year and going to cost more?

The retirement village sector is quietly spending more than $1.3 billion a year on one thing: getting units back to market.

Not new developments. Not acquisitions. Not technology.

Refurbishment and reinstatement.

The newly released StewartBrown FY25 Retirement Living Performance Report provides one of the clearest insights yet into the growing cost of keeping Australia’s ageing retirement village stock relevant to the ‘next’ buyer.

According to the report, the average retirement village in Australia is now around 30 years old, with annual resident turnover sitting at approximately 11%. StewartBrown reports that around 5% of village units undergo reinstatement works at an average cost of $14,500 per unit, while a further 6% undergo full refurbishment at an average cost of $76,619.

Using Australia’s estimated 250,000 retirement village units as the base, our back-of-the-envelope calculation suggests the sector is spending approximately $1.33 billion every year on refurbishment and reinstatement works alone.

That equates to around 27,500 units turning over annually, with an average spend of approximately $48,000 per unit before it returns to market.

These figures matter.

For years, the retirement village sector has positioned itself as one of the most affordable forms of seniors housing in Australia, with the average two-bedroom retirement village unit priced at around 55% of the national median house price.

The hidden story inside the StewartBrown data is not just the cost of the works. It is the speed at which operators are completing them.

On average, these refurbishments are occurring in 84 days.

That turnaround time is becoming increasingly difficult to maintain.

As global instability drives fuel prices higher, the flow-on effects are beginning to hit supply chains across the property and construction sectors. Operators are reporting suppliers cutting deliveries back to once a week to manage their own freight and operating costs.

One delivery a week does not sound significant until you remember the clock is already ticking on an eight-week refurbishment cycle.

Every delay impacts resale timing. Undeniably important with mandatory buybacks now required across the country.

Every additional week impacts cash flow. Critical with residents staying longer and turn over rates dropping as residents remain in their village home longer.

Every cost increase tests the price elasticity of the market. If 55% is affordable, so too is 65% if the operator is bold.