Seniors living: the accommodation options

The Australian seniors living sector is a rapidly evolving industry driven by the aging population, government policies, and growing demand for more flexible and diverse living options for older Australians.

With the increasing number of people aged over 65, the sector has seen significant growth and transformation over recent years.

As well as highlighting recent sales and trends in the market, the latest CBRE Senior Living report explores three key segments of the sector: aged care, retirement living, and land lease communities.

1. Aged Care
Aged care in Australia provides a range of services designed to support older individuals who can no longer live independently.
The sector is essential due to the increasing number of Australians aged 65 and over.
By 2050, it is estimated that one in four Australians will be over the age of 65, placing substantial pressure on aged care services.
Increases in construction costs have also impacted the aged care sector disproportionately compared to other sectors, with additional compliance requirements seeing average development costs per bed of $400,000–$450,000.
The aged care system in Australia is a mix of government-funded services, private facilities, and not-for-profit organisations.
Aged care services range from home care packages to residential aged care facilities.
The federal government plays a critical role in funding and regulating the sector, with the Department of Health overseeing the delivery of services.
Key Trends:
- Home Care Packages: There has been a growing preference for home care services, allowing seniors to remain in their homes for as long as possible. These packages provide funding for personal care, nursing, domestic assistance, and other services, helping to delay or prevent the need for residential care.
- Residential Aged Care: The demand for residential care continues to rise, particularly as the population ages. However, the industry has faced significant challenges, such as staffing shortages, regulatory changes, and concerns about quality of care, which have been highlighted in reports such as the Aged Care Royal Commission.
- Regulatory Changes: The Aged Care Royal Commission, which concluded in 2021, resulted in a series of recommendations aimed at improving care standards, including increased funding, better staff training, and greater transparency. The implementation of these recommendations is expected to reshape the aged care landscape.
2. Retirement Living
Retirement living refers to housing options designed for older adults, typically aged 55 and above, who are generally independent but prefer the security and convenience of living in a community tailored to their needs.
Retirement villages can include independent living units, assisted living services, and community activities that promote social interaction and engagement.
In Australia, the retirement living market is highly diverse, ranging from smaller, local villages to larger, resort-style developments.
The sector has grown as more Australians choose to downsize and seek more manageable housing options as they age (continues below).

Key Trends:

- Upscale Retirement Living: Over the past decade, the demand for high-quality retirement communities has increased. These developments offer luxury amenities such as pools, gyms, and on-site healthcare, appealing to wealthier retirees looking for a comfortable lifestyle. These communities often provide a range of additional services, including health care and recreational activities, enhancing the appeal to affluent retirees.
- Aging in Place: Many retirement villages are adapting their models to accommodate residents who may need increasing levels of care over time. These villages are integrating more flexible care services, such as home care and assisted living, allowing residents to stay within the same community for longer.
- Financial Models: One key aspect of retirement living is the financial model used for the properties. Typically, residents purchase the right to live in a retirement village, often through a leasehold arrangement or a “loan for lease” structure. As the market matures, new models, such as shared equity and rent-to-buy schemes, are emerging to make retirement living more accessible to a broader range of seniors.
3. Land Lease Communities
Land lease communities are a unique form of seniors living in Australia.
These communities consist of privately owned land on which residents lease their homes.
This model allows seniors to purchase a manufactured or modular home while renting the land it sits on.
The homes in land lease communities are typically more affordable than traditional retirement homes and offer greater flexibility for the resident.
Land lease communities are becoming an increasingly popular option for retirees seeking more affordable housing, particularly as the cost of traditional retirement living options continues to rise.
These communities often provide residents with a sense of ownership, while also benefiting from the shared services and social activities typical of retirement villages.
Key Trends:
- Affordability: The affordability of land lease communities is a key factor in their growing popularity. Many retirees are drawn to these communities due to the lower upfront costs compared to buying a house or even purchasing a retirement village unit. The ongoing rental payments for the land are generally more affordable than purchasing a traditional home.
- Regional Growth: Many land lease communities are located in regional and coastal areas, attracting retirees looking to downsize and live in more relaxed, scenic environments. This trend has accelerated due to the rise of remote working and a desire to escape crowded cities.
- Sustainability and Innovation: Some land lease communities are adopting sustainable building practices and providing eco-friendly homes. With an increasing focus on environmental impact, these communities are appealing to a more eco-conscious senior demographic.
Evolving sector
The Australian seniors living sector, comprising aged care, retirement living, and land lease communities, is undergoing significant transformation.
As the population ages, the demand for housing and services tailored to older Australians will continue to grow, creating a dynamic market with evolving investment opportunities.
Recent sales and trends in each segment reveal that the sector is attracting substantial investment, signalling its long-term potential.
However, the challenges of affordability, regulatory compliance, and care standards remain important factors that will shape the future of this critical sector.
For CBRE’s Seniors Living report, contact Marcello Caspani-Muto at marcello.caspani-muto@cbre.com.au.