Thinking of moving into aged care? Here’s what you should know

The latest Retirement Living Council/PwC Retirement Village Census paints a picture of an industry at a turning point. With record participation, the 2025 census provides the most comprehensive snapshot yet, representing more than 100,000 units across 1123 villages and more than 100 operators.

The headline is clear: demand is strong, supply is constrained. But beneath the numbers are two issues that will define the next decade – contracts and care. Retirement villages are more than property transactions. They are lifestyle choices, financial decisions and increasingly, a pathway through ageing.

For residents and their families, understanding the costs means understanding three stages: going in, staying and leaving. The average ingoing price of a two-bedroom unit nationally is $711,000, around 61 per cent of the median house price in the same postcode.

The ongoing cost is the price of living there. The average monthly service charge is now $645 – an increase of 3.2 per cent on the previous year. These fees fund the operation of the community, maintenance and shared services and are charged on a cost-recovery basis.

Then there is the outgoing cost – the part of retirement village contracts that causes the most confusion. Most exit fees are based on the entry payment (45 per cent), with the average exit fee being 33 per cent. Where capital gain is shared (39 per cent), it is typically a 50/50 split between the resident and operator.

One emerging trend is the growth of upfront management fees, representing 8 per cent of contracts in 2025. This is potentially a significant proportion of residents given the model is not offered across all villages.

This model can offer residents several potential benefits. Paying the management fee upfront normally means the cost is discounted compared with paying on exit. It can also allow more funds to be exempt for pension purposes.

The model also has care implications potentially reducing Support at Home contributions in the village. And longer term, having more money returned at the end can preserve capital for the next stage – a move into residential aged care.

But retirement living is not without challenges. The age of residents is increasing. The average age at entry is now 76, while the average age of current residents is 81. That is reflected in care.

Thirty-seven per cent of residents leaving villages move into residential aged care, and 59 per cent of villages now provide Support at Home services.

Villages can provide care efficiently and cost effectively, with some allowing residents to purchase services in 15-minute increments, keeping support regular and costs manageable. However, long wait times for assessments and package funding may be contributing to the number of residents moving into residential aged care.

The old idea that retirement villages are simply places for healthy retirees is changing. More residents want their village to be their “forever home”. The future of retirement living will not be defined just by how many homes are built.

It will be defined by whether the industry can deliver what older Australians increasingly want: certainty, transparency and support to age well in their home in the village.

Rachel Lane is the author of Downsizing Made Simple, a book and website aimed at demystifying downsizing.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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