Daniel Gannon | Canberra's housing solution is hiding in plain sight

Retirement communities are a housing solution whose time has come given the great Australian dream of home ownership is becoming a nightmare for many. This sentiment was underscored by the recent 2023 Intergenerational Report.

We now know there are two million people around Australia aged over 75 today, a number that will grow to 3.4 million over the next two decades. Here in the ACT, this figure increases by 40,000 in this time.

While the demographic and housing outlook is grim, there is a solution to this crisis.

The ACT is home to numerous retirement villages that allow residents to maintain their independent lifestyle as they age, while still enabling them access to care, support services and community.

Importantly, this sector not only provides secure housing to a growing number of older people but younger people, too.

When older Canberrans "rightsize", their homes often go back into the market, and transfer to singles, couples and growing families.

As our population shifts, it will also have socio-economic impacts, including the housing supply shortage and the pressure on an already struggling residential aged care sector.

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By reducing barriers to physical activity and providing access to gyms and fitness facilities, retirement villages help residents remain more frequently active than those living independently in the community and interacting with hospitals and GPs less frequently.

This should be music to the ears of the ACT government because this results in significant financial efficiencies.

Across the nation, it amounts to several hundreds of millions of dollars every year - the equivalent of new hospitals and thousands of additional nurses and doctors.

But the real hero of this story is affordability, which can help turn this housing nightmare into the great Australian dream.

Retirement communities are designed to provide an affordable option for older Canberrans, with entry prices across the nation's capital on average 43 per cent lower than median house prices in similar areas.

The average cost of a two-bedroom unit in a Canberra retirement village grew by 6.5 per cent over the 18 months to December 2022 to $619,000, while median house prices in the same locations over this period rose by 9.4 per cent, to $1,082,000.

This represents a significant financial discount for older people - but here's the thing.

Investment conditions governing the industry can be strengthened or eroded by legislative and planning frameworks across the state. Getting regulation right is a delicate balance.

There are some retirement village operators that have been held up for years by overly complex red-tape and governments prioritising ordinary medium-density residential apartments in place of these important age-friendly communities.

Governments should improve access to land and increase availability, expedite processes for planning and building permits, and target minimum land allocations in undersupplied areas.

But it doesn't just start and stop with planning systems. The federal government should increase the asset free threshold for aged pensioners, allow retirement village residents to access the Home Equity Access Scheme, and continue to reform Commonwealth Rent Assistance.

Until governments get serious about some of these important policy reforms that would unlock and facilitate more supply, our housing problems will continue to get worse.

The great Australian dream of home ownership can become a reality for tens of thousands of Canberrans under the right circumstances - and the solution is right under our nose.