I’m Comparing The Costs Of My Living Options
The biggest question for most people when weighing up living options for their freedom years (previously called retirement!) is how much will each cost.
St Ives retirement villages, as with all options, offer a huge range of home choices ranging in price from $295k right up to $1.3m. What is right depends entirely on your situation and any decisions should be made with the advice of a qualified financial planner, with input from your family and a lawyer. The below is an overview of the costs associated with St Ives retirement living and is intended as a guide only. Before moving in, we will provide you with a contract outlining all fees, which we recommend having reviewed by an independent financial advisor.
What can I expect to pay at a retirement village?
Most retirement villages operate on what is called a Deferred Management Fee (DMF) model. This is a way for you to enjoy the village now, and pay the majority of the costs after you move out, rather than up-front. This is a model unique to the retirement living industry, which allows units to be much more affordable than comparable real estate in the area. It works like this:
Before you move in.
You’ll purchase your new home in the village at a price that is largely reduced compared to other real estate in the same postcode. In Perth, the average rate for a two bedroom retirement living unit is 84% of the cost of a median house price in the same postcode (2017 PwC/Property Council Retirement Census).
During your stay.
You’ll pay a monthly ‘common service’ fee, which helps cover the running costs of the village and keep everything maintained to a very high standard.
After you leave.
Your unit is refurbished and resold. At this point, you will pay the DMF, which is a percentage of the sales price to the village operator, with the rest being refunded to you or your family.
More information on this model, as well as examples of the costs can be found here.
And a great short video explaining these costs can be viewed here.
How do retirement villages compare to down-sizing or staying at home?
These can be great options if you love where you live and have a strong support network around you – and when you look at capital costs alone, they may seem like financially better options.
However, a recent report (October 2017) from the University of Technology, Sydney shows that when you add lifestyle costs and the intangible benefits, like social connection, security and peace of mind, retirement villages are a more appropriate option than general residential living.
In a nutshell, when you add in lifestyle costs to the cost of your home, such as entry to local amenities, club memberships and social activities – all of which are already included in village life – the two options end up being financially comparable. You can view the full report here.
Plus, retirement villages provide a range of knock-on mental and physical health, social and wellbeing benefits from being connected to a community of like-minded people.
Why would I move to a village and not a new apartment development?
There are some beautiful developments popping up all round the country that claim to be built with senior living in mind. It’s worth checking to see if any of the ones you may be interested are compliant with the Accessible Housing Code.
This means they’ve been built not just with senior’s wallets in mind, but with their practical living needs. The Code requires things like doorways being extra wide to accommodate future accessibility needs if a resident needs a wheelchair, easy access to units, and guidelines around fittings, switches and other hardware.
Without these in-built into the apartment up front you may find yourself needing to fork out on big renovations as you grow older and your accessibility needs change.
Couldn’t I save a packet with a brand new Granny flat?
Yes you could! But not only would you miss the health and happiness benefits outlined above, you’d be running the risk of your daughter-in-law seeing you stroll around in your PJs each morning!