When ‘market ready’ isn’t enough

Last fortnight we explored the scale of refurbishment and reinstatement activity occurring across the retirement living sector.

The numbers were striking. Based on StewartBrown FY25 data, operators are collectively spending an estimated $1.3 billion each year preparing units for resale.

What is perhaps even more interesting is that the biggest decision is often not how much to spend.

It is deciding what type of work should be undertaken in the first place.

When a resident vacates a unit after ten, fifteen or even twenty years, operators are typically faced with three choices.

Do we reinstate?

Do we refurbish?

Or do we fundamentally reconfigure the unit to better meet current market expectations?

The answer is rarely straightforward.

A unit may be in excellent condition, yet still struggle to compete against newer retirement communities, lifestyle developments and contemporary apartments. Equally, a significant refurbishment investment may not always deliver the return expected if the local market is unwilling to pay for those upgrades.

This is where refurbishment shifts from being a maintenance issue to an asset management decision.

Operators must balance a range of competing considerations including vacancy costs, buyer expectations, village positioning, resale values, construction costs and future portfolio strategy.

Increasingly, the conversation is no longer about simply making a unit market ready.

It is about making it market competitive.

With mandatory buybacks, ageing village stock and growing competition across the seniors housing sector, every vacant unit represents both a risk and an opportunity. The challenge is determining the level of investment required to maximise asset performance while maintaining affordability and market appeal.

At our upcoming Masterclass, we will explore these decisions in greater detail. Joining us will be Mark Eagleston from Calvary Health Care and Chona Navarro from Uniting NSW.ACT, alongside specialist Jolyon Good, CEO Good Construction, to discuss how operators are approaching refurbishment strategy, managing vacancy risk and determining what “good” looks like in today’s retirement living market.

Because sometimes the most expensive decision is not spending too much.

It is spending too little.