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How do retirement villages work?

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Has the incredible lifestyle on offer in a retirement village caught your eye but you’re not overly sure how a retirement village works? Keep reading as we guide you through the ins and outs of life in a retirement village as well as the associated cost of pursuing your dream retirement lifestyle.

What is a retirement village?

Retirement villages are designed to create a purposeful life for retirees looking to make the best of their golden years. If you’re looking to explore new hobbies, make new connections and live in a safe and secure community, a retirement village could be your best option!

Typically consisting of stand-alone units, retirement villages maintain a resident’s independence and freedom while providing an array of amenities that provide a fulfilling and happy retirement.

At St Ives, our villages offer accommodations that cater to different lifestyle preferences. Choose from modern apartments and penthouses to larger detached homes. Our network of retirement villages across Western Australia means you’ll be sure to find your perfect accommodation.

Who lives in a retirement village?

In Australia, retirement villages are typically designed for retirees over the age of 60 who can live independently. Often muddled with aged care facilities, retirement villages don’t provide assisted or live-in care services.

St Ives welcomes individuals over the age of 60 who are ready to live their retirement years to the fullest! We strive to create welcoming communities of like-minded individuals, who can create meaningful connections and enjoy new hobbies. Imagine your afternoons spent enjoying a game of lawn bowls with your neighbours, before catching up in the clubhouse.

Don’t take our word for it, our latest Happiness Report showed that 94.7% of St Ives residents are happy with the relationship they have with their neighbours!

What amenities are on offer in a retirement village?

Built to ensure retirees can make the most of their golden years, different villages offer a range of amenities including hair salons and art studios to indoor pools and gym facilities.

It’s important to consider what you see for your retirement and if your desired village provides amenities that allow you to meet your retirement goals.

At St Ives essential amenities come as standard. All homes and common areas are fitted with a 24-hour emergency call system that connects directly to emergency services. Clubhouses are a core element of our village lifestyles, serving as a community space where our residents can share stories and create lasting bonds. Visit our village pages to explore the fantastic amenities on offer.

How much does it cost to live in a retirement village?

With such a fantastic lifestyle on offer, you are probably wondering what the costs are.
The fee structure of a retirement village operates on a deferred management model, in which residents will pay a portion of the price prior to moving in, and then a lump sum when leaving the village. There are three main costs associated with a retirement village:

Ingoing Contribution

Much like purchasing a residential property, your chosen accommodation is valued against market factors including location and size. This constitutes your ingoing cost. The terms of the contract will stipulate whether you own the Strata title or whether you have purchased the property on a ‘lease for life’ basis.

Monthly Services Fee

While living in a retirement village, residents pay an ongoing maintenance fee. At St Ives this fee goes towards maintaining your garden, the exterior of your property and common areas. This also includes access to on-site amenities for example gyms, pools or art centres – costs that a retiree would typically incur when living in a residential property.

On-site maintenance is a much-loved inclusion by residents as they’re able to adopt a low-maintenance lifestyle, swapping boring household chores for new hobbies and socialising!

Outgoing costs

Should residents require a high level of care, or simply decide the lifestyle is not for them and decide to leave a village they are required to pay the associated deferred management fee. This is calculated based on the market value of the property and the duration of a resident’s stay. In addition, you’ll need to cover the cost of realty fees and refurbishments, as when selling a residential dwelling,

We’ve broken it down in a case study below!

An example of Outgoing Costs

This chart is an example of all Outgoing Costs for a home costing $500,000. The below table is based on 2% annual growth (2% is the arbitrary figure mandated as per the Fair Trading (Retirement Village Interim Code) Regulation 2018) and a DMF charge of 3% annually.

Ingoing Contribution (price you paid) $500,000
Estimated valuation (sales price – after 10 years at 2% growth) $609,497
Your length of stay 10 years
DMF (3% per year for 10 years = 30% of the estimated valuation) -$182,849
Estimated refurbishment costs (based on 5% of estimated valuation) -$30,475
Re-leasing/marketing costs (based on 3.3% inc. GST of estimated valuation) -$20,113
Total deductions -$233,437
Total estimated refund entitlement (what you receive back) $376,050

This is an example only and not a quote – the values used in this example are illustrative only and do not guarantee an entitlement to a specific refund amount. Please note additional deductions may also apply.

A specific example of Outgoing Costs relative to your Village will be provided for review within your contract, or on request, which you can review in detail before any agreement is signed.

A report from the University of Technology, Sydney, shows that when you add up the financial costs of a retirement village with the intangible benefits, like social connection, security and peace of mind, retirement villages are a more appropriate option than general residential living. Truly allowing residents to live their retirement years to the fullest.

If you want to find out more about the estimated costs, or life at St Ives contact our friendly team today!