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Retirement Villages: The Right Move For You?

Couple enjoying drink - retirement village options
Are retirement villages the right choice for you?

One of the key decisions for many retired people is whether to stay in their existing home or to downsize to retirement villages or smaller residential property. This decision is often closely related to the financial decisions made around funding your retirement, although many other considerations need to be taken into account as well, writes Richard Andrews.

Financially, you will almost always be better off staying in your existing home, because buying and selling a property incurs fees and charges that can take years of capital growth to offset. Even if your yard is too large and you need to get a mowing service in to do the gardens once a month or a cleaner to help with the vacuuming, it can still be worth it.

Our advice is that you should consider moving only if:

  • you are alone and/or lonely
  • you fear for your safety or have security concerns about your house or neighbourhood
  • you don’t drive or have access to a car, and public transport is not available nearby
  • you are bored
  • you have an older property that is likely to require considerable investment in the future on major items such as roofing, flooring, plumbing or wiring
  • your current home presents access issues for you, such as a steeply sloping block, steps or multiple levels.

If any of these apply to you, then you should move on to the next question.

Should I move into a retirement community or just a smaller house?

The decision whether to move into a retirement community or just into a smaller house is also a complex one. You must understand one important point, however — a retirement community is about lifestyle. If you are bored, lonely or alone, or fear for your safety, then you should definitely consider a retirement community because it will enrich your life from just about every perspective.

However, if you already enjoy a busy retirement with a big social network and lots of activities, then you could probably address all your needs simply by moving to a newer, smaller, more secure and better located home. In this case you would also need to be in good health, or have access to an emergency alarm pendant if you are aged in your late seventies or above, so if you have a fall you won’t lie injured on your floor for three days until someone finds you.

Try to avoid making this decision based purely on financial considerations because a retirement village will never stack up against a normal, freehold residential property.

Advantages & disadvantages of staying in your existing home



Moving incurs transaction fees (stamp duty, sales commissions)

Home too large for current needs

Moving is stressful

Limited ability to access capital tied up in property

Avoid leaving familiar family home with all its memories

Less maintenance would be needed in retirement home

Avoid leaving established community and support networks

Missed opportunity for a fresh start in a better location

Why move into a retirement home? 

There is no doubt that most people aged over 65 years prefer to live in their own home as opposed to moving into a retirement village. Only about five per cent of Australia’s seniors currently live in a retirement village. It is not known why this figure is so low in comparison with the United States, for example, where about 13 per cent of over-65s live in retirement complexes.

Why, then, do so many retirement communities around the nation have waiting lists of people ready to move in?

People make the decision to move into a retirement village for a number of reasons. Listed here are some of the more common explanations that you may be able to identify with:


One of the main reasons people want to move out of their home is because of neighbourhood problems: barking dogs, loud music, hotted-up cars, general noise or changing suburban demographics. Retirement communities have rules and restrictions that protect residents from stressful situations, and this is very attractive to seniors. It is not unreasonable to want to live somewhere designed to protect your peace of mind, wellbeing and happiness. It could also be argued that seniors need more quiet and relief from everyday stress, and this is especially true for those with health problems.

Home maintenance

Maintaining a large family home can be hard work, particularly for older homes. Mowing big yards, especially in the summer, weeding, pruning, painting and watering can take up most of your spare time and prevent you from enjoying those things you had planned to do in retirement. You may also want to travel, and you should be able to do this without worrying about your home – is it secure, who is clearing the mailbox or mowing the lawn while you are away?


People often find that their existing home is too large for them or presents access problems with stairs, narrow access ways or multiple levels, whereas retirement homes are specifically built for easy access and maintenance.


Elderly people are particularly vulnerable to home invasion and if they do not feel safe in their home or neighbourhood, it can cause a great deal of stress.

Social life

Retirement communities are full of like-minded people who generally want the same things out of life that you do. This can make for a busy social life, if that’s what you want!

All of these reasons are compelling arguments for you to move into a retirement community. The advantages and disadvantages of moving into a retirement community instead of a normal residential property are summarised below.

Comparison of moving into a retirement community



A community of similarly aged and like-minded residents

Typically a more expensive living option — higher transaction costs

Homes specifically built for low maintenance

Smaller properties, with little or no backyard

On-site management and, in some cases, meals and medical care

Limited choice of locations as well as accommodation products

Facilities such as gym, pool, clubhouse, village bus

Generally a poor financial outcome for residents upon exit

Resident restrictions such as minimum age, no pets

Limited cultural and age variation

Instant social life, friends and activity programs

Typically no-pets policy

Security and support

Higher density living – cramped

If you don’t really have much idea what you want, or if you are basically bored (and this is not unusual for retirees), then a move to a retirement community will certainly kick-start your life again!

What is a “retirement village”?

You will probably have heard a retirement village referred to by many different names, such as ‘over-50s village’, ‘independent living resort’, ‘retirement community’ or even ‘lifestyle community’. These terms have been introduced by marketers trying to escape the traditional image or stigma of a retirement village – that of an old, depressing suburban complex of boring yellow-brick and chocolate-tile buildings inhabited by the grey cardigan and cup-of-tea brigade.

Retirement villages provide accommodation for older, retired people who are largely still able to live independently. Most accommodation options in Australia target the low and middle socioeconomic demographic, with community-style accommodation and additional services such as meals, cleaning or nursing. Further subsectors within the retirement living industry include assisted living units, independent living units and resident-funded villages.

  • Assisted living units are traditionally small villa- or apartment-style complexes that provide residents with a higher level of on-site care and services and assistance with day-to-day living tasks.
  • Independent living units (ILUs) are found in age-restricted communities and generally consist of standalone dwellings or apartments that provide accommodation to residents who are independent and require little, if any, assistance with daily living activities. ILUs may also provide an additional range of services on demand such as cleaning, laundry and catering, as well as aged care support services.
  • In resident-funded villages, residents own a freehold strata-titled property within a complex and pay the full-cost of maintenance, management and day-to-day running through on-going service fees. Any additional services required, such as catering or nursing, must be brought in from external providers such as Meals-on-Wheels or Blue Care.

Types of retirement accommodation

When you start researching retirement villages you may be overwhelmed by the variety of accommodation options available to you — the number of rooms, the size, the style, and so on. Put simply, there are basically only two types of retirement housing — an independent living unit and a serviced apartment. An independent living unit can be a villa, similar to a one-level townhouse, or an apartment. A serviced apartment is simply an apartment!

If you are like most retirees, you are probably uncomfortable discussing your health and believe you will live forever! As a rule of thumb, if you are in your mid to late seventies or older, you should consider retirement villages that offer increased care services. If you are between the ages of 55 and 75 and in pretty good health, then it is likely you can afford to be more flexible in your choice of village and select a complex with no internal care provisions.

The best solution is for you to remain in one location for as long as possible.

Modern retirement living communities try to offer a mix of accommodation styles and care options. This allows the village owner to manage residents within the complex as their needs increase. For example, a resident may initially move into an independent living villa or townhouse within the community. As their independence and mobility decrease, they have the option to move into a smaller, more easily maintained apartment also within the community. This is a great option for residents as they are able to increase their levels of care without leaving the community and their friends.

There are downsides to this strategy, however. Many retirement home purchase contracts include clauses that allow the village manager to force the resident to move into the higher care option. In addition, the resident has to execute an exit and resale of their independent living unit and purchase an aged care unit, a process that has considerable financial implications for the resident. Another problem can be the lack of available beds in the aged care facility — you may have to go onto a waiting list.

Villas & apartments

Villas and the larger, two- and three-bedroom apartments are popular with mobile, independent retirees. This type of accommodation is designed for fully independent living and can range from basic through to luxury living. These purpose-built residences are not dissimilar to standard residential housing, although they feature special retirement living fittings such as enhanced security, emergency call buttons for medical assistance, wider doorways and larger shower cubicles.

Residents of independent living units have access to all the community facilities within the complex. These units are typically unserviced — that is, care and other services are not automatically provided — although residents can purchase services such as cleaning or personal care for an additional fee.

Serviced apartments

Serviced apartments are smaller than independent living units and offer an enhanced level of care. The resident will pay a higher general services or Village Fee and receive services such as cleaning, meals and laundry.

Serviced apartments are designed to provide a level of personal care within a residential environment to individuals who can no longer cope with some daily tasks on their own. Typically these residents require assistance in one or more activities of daily living including housework, shopping, meal preparation and, in some cases, personal care. We categorise these residents as being in the ‘middle continuum of care’, between independent living and an aged care home. They are typically aged 75 years and over.

Studio apartments or hospital rooms (high-care facilities)

The third style of accommodation is the studio apartment, which is similar to a private hospital room. These units, popular with residents requiring close medical supervision, are generally located in a ‘hospital wing’ within the village and offer 24-hour medical care.

Potential residents of independent living units take comfort from the close proximity of higher-care facilities within the complex, reassured that they will not have to relocate to another facility in the future as their mobility and independence decrease. This provides a kind of psychological safety net, similar to having a medical centre next door.

Purchasing your retirement village “home”

If you decide that a retirement village is for you, you then have to navigate through the fairly complex business of both finding a suitable village in the area you want and signing the necessary contract.  Most retirement villages operate on the Deferred Management Fee (DMF), also known as Loan / Licence or Loan / Lease. It is important to understand that under this option, the resident does not actually own the freehold title to his / her / their unit. This remains with the owner of the village. Instead, the resident purchases a “right to occupy”, usually in the form of a lease or licence. However, there are also other options, namely-

Freehold (typically in a strata title community), Leasehold, Company Title & Rental

As with any property purchase, you would be well advised to seek competent, professional advice before signing any contract.  There are consultants  who can assist you with both finding a suitable village and working through the contracts.

If you decide that a retirement village is for you, you then have to navigate through the fairly complex business of both finding a suitable village in the area you want and signing the necessary contract.

Richard Andrews

Written by Richard Andrews. This is an edited extract from the book The Rest of Your Life – How to make it as good as you want. This and other books of interest to retirees can be found on the My Life Change website.

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