October 15, 2020. No-one can dispute the lifestyle offering, care and support Retirement Villages offer its residents, however the question many customers are asking themselves is, can I afford it? And I’m not just saying this about low to middle-class Australians – all Australians. There’s no doubt that the idea of ‘retirement villages’ was created with good intentions, but over the years the ingoing/ongoing and outgoing fees have reached a point where the value is no longer there. When the ingoing exceeds the median house price and where the outgoing is stock standard 30% exit with no cap gains…you tell me where the value is?
One thing is for sure, the market has responded, and customers are just not having it.
This has resulted in a very exciting albeit challenging time for the retirement village industry. Developers are having to innovate with their financial structures whilst still ensuring an amazing lifestyle offering. Customers now have more choice than ever before when it comes to how they enter and pay for their home at a retirement village.
MOST importantly, marketing teams can no longer just talk about the lifestyle offering and shy away from explaining the financial advantages of their villages. Let’s be honest, most marketing people hate talking about the financials, because it’s complicated….but there lies the value to the consumer.
Have you ever tried to put your customer glasses on and understand how challenging it is to decipher 5 retirement villages VCDs?
Over the years many people have said to me ‘Retirement villages is not financial decision for customers, it’s a lifestyle decision’, that may be true to some extent but it still needs to represent true value to the customer and customers need to be able to comprehend the offer.
Developers that listen to customers, innovate their offering and that can articulate their lifestyle and financial offering in a clear and compelling way, will succeed.