Also shown is a comparison calculated at an identical growth rate in property value for those who may remain in the family home.
Governments through incentives and legislation encourage older Australians to make the move from the traditional family home into retirement accommodation such as a retirement village. Although there are aspects of life in a retirement village that are beneficial to the retiree, the reduction in capital value is clearly excessive and does not represent fair and reasonable value for those intangible benefits as claimed by the industry.
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Great little chart.
ReplyDeleteI had a gut feeling that the figures may end up well in favour of the Village owner but the actual total is quite staggering if the operators fees and charges are all on the high end of the scale.
I found your site after seeing the Les Scobie reply to the Australian Aging Agenda article on "like for like comparison" between village life and general residential living. I wish I had access to your numbers earlier. I will bookmark this site for future reference.
One not so small addition to the table you have prepared may be the cost of selling the Village unit by the resident and the time it takes. My Mums case was that the village uses their own Agent and charges a fee they nominate. The fee percentage is not set in the contract so the Village operator can set any figure they want for this service and there is no way of getting a competitive offer. The sale took 9 months and a good portion of the money was tied up for this entire time even though my mum had gone into Aged Care. The cost of this was around $30k as if you pay a combination DAP RAD for care you will pay the daily accomodation payment rate (not Refundable) until the money comes through. As $550k is the amount Aged care facilities can charge before the need dispensation from the Government the daily accomodation payment is rather large and every day the Village held onto the money reduced my mothers funds. As the village sets the inspection times they can sell other units before yours. Funnily enough the sale came through just as the maximum time the village could charge continued maintenance costs (9 months) ran out.
Hello Grant,
ReplyDeleteThank you for your comments. This site, the blog, a facebook page and a twitter account ( https://twitter.com/retvilldotnet ) were all motivated by my own 10 years experience so far of living in a retirement village. I chose a church based not-for-profit village thinking that I would not encounter a 'Gordon Gecko' style organisation, sadly I was mistaken. My experience was also soured by poor legal advice and little or no support from Consumer Affairs Victoria . As a contributor to both the Victorian and NSW government retirement village enquiries I try and make information available to those contemplating life in a retirement village. There are plenty of retirees who enter retirement villages and have a very happy experience, my observation however is that they are generally naive to the financial damage. By the time they do become aware it is too late, they are trapped. I believe industry will always hold sway over the legislators so my contribution is to alert consumers to the dangers of the product but of course the ultimate decision is still theirs. Thanks again for your comments and particularly inclusion of selling costs.