Business Case Augusta Lifestyle/Retirement Village May 2014
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BUSINESS CASE AUGUSTA LIFESTYLE/RETIREMENT VILLAGE MAY 2014 Rosewood Care Group 67 Cleaver Street, West Perth Western Australia 6005 P: (08) 9328 5822 F: (08) 9328 2417 E: [email protected] www.rosewoodcare.org.au Business Case Augusta Lifestyle/Retirement Village May 2014 TABLE OF CONTENTS PART 1 - DEMAND STUDY Summary Page 3 1.1 Introduction Page 6 1.2 Community Meetings Page 7 1.3 Demand Analysis Page 10 1.4 Community Survey Results Page 13 1.5 Housing Options/Competition Page 15 1.6 McCrindle Baynes National Survey Page 18 1.7 Conclusions Page 20 PART 2 – DEVELOPMENT & CONCEPT 2.1 Environmental Proposals Page 23 2.2 Services Page 23 2.3 Site Plan/ Staging Plan/ Floor Plans Page 24 2.4 Commerce Page 26 2.5 Program Page 28 2.6 Land Tenure Page 28 2.7 Type of Village Page 29 2.8 Recommended Village Option Page 35 2.9 Putting the Package to the Not for Profit Market Page 36 Appendices: Appendix 1 – Survey Questionnaire Report Appendix 2 – Environmental Proposals Appendix 3 – Service Plans Appendix 4 – Architectural Concept Plans Appendix 5 – Order of Magnitude Estimates Appendix 6 – Indicative Development Program Appendix 7 – The Deferred Land Payment Option 1 | P a g e Business Case Augusta Lifestyle/Retirement Village May 2014 BUSINESS CASE AUGUSTA LIFESTYLE/RETIREMENT VILLAGE PART 1 – DEMAND SUMMARY 2 | P a g e Business Case Augusta Lifestyle/Retirement Village May 2014 SUMMARY The Shire of Augusta Margaret River has identified the potential need for a lifestyle/retirement village in Augusta. A feasibility study produced by the AEC Group in March 2013 confirmed that the proposal could be feasible under the right conditions. In January 2014, the Shire appointed the Rosewood Care Group to prepare a business case for a new lifestyle/retirement village in Augusta. This section of the business case aims to establish the level of demand for a lifestyle/retirement village in Augusta. Particular importance has been placed on community consultation. From talking to a wide range of people in the local Augusta community, we established that there is demand from existing residents for alternative housing options for older people in Augusta. However, the level of demand was difficult to quantify. The concept of a lifestyle/retirement village appears to be accepted by the community, so long as it offers free standing, age friendly, 2-3 bedroom homes at around a $400,000 price point. Whilst the existing 18 Leeuwin and Catholic Church units play a valuable role in the community, there is a view that they are an older generation of seniors housing and that they are not attractive to a large section of the current over 65’s population in Augusta. The site identified by the Shire for the purposes of this report - close to the Community Hall and accessed off Hillview Road – was generally considered to be well located in terms of town centre and leisure facilities. Some people would like to see a larger site (with a larger village) developed and some people would like the site to have the capacity for expansion. Based on ABS census data and typical market penetration for retirement villages, the theoretical demand in Augusta (2016 forecast) is estimated to be somewhere between 6 and 9 units, increasing to between 12 and 16 units by 2021 and to between 18 and 23 units by 2026. This demand forecast is based on the local township of Augusta population only and ignores people who may move directly to a retirement village unit from elsewhere in the south west region or from further afield. A questionnaire based demand survey was carried out in Augusta. A total of 99 responses were received from local people aged 65 and over which we have calculated to represent 175 local people, or 41% of the people aged 65 and over living in Augusta. This is considered to be a very representative portion of the local community. A selection of the key results from the questionnaire is listed below: 89% of the people who responded owned a house with a value of over $400,000, The house features people are looking for are in line with current industry norms – e.g. a free standing home with 2 or 3 bedrooms, 88% of people who responded consider the proposed site location to be a good one. Only 12 people who responded considered themselves to be “actively looking for the right lifestyle/retirement village” at the moment, and Only 3 people who responded said that “if they found the right development they would be likely to move in the next 12 months”. Only 12 responses from people who said that they were actively looking for the right lifestyle/retirement unit (from 41% of the over 65 population) would suggests that there may be 3 | P a g e Business Case Augusta Lifestyle/Retirement Village May 2014 current/new demand from people living in Augusta for as many as 29 units. However, it is considered unlikely that everyone who says they are “looking” would choose to live in a new retirement village in Augusta (if it was built). Only 3 responses from people who said that they were likely to move in the next 12 months (from 41% of the over 65 population) suggests that there is current/new demand from people living in Augusta for only 7 units. This is likely to be a more accurate reflection of the real demand today. The closest retirement village unit provision to the LGA of Augusta Margaret River is Busselton, where there are two larger lifestyle retirement villages and one smaller village. Retirees seeking a sea change/tree change lifestyle in the South West corner of WA are likely to consider Busselton alongside Margaret River and Augusta. There are currently 443 retirement village units in Busselton, which represents a market penetration of 9% - considerably higher than the WA and national averages. From a positive point of view, this market penetration suggests that retirees move to Busselton from elsewhere. From a negative point of view, if we combine Busselton with Augusta Margaret River, the overall market penetration of retirement village units for the region is 8.2% which suggests that the combined region is over provided with units. The 2011 Census information identifies that the demographics within the Augusta Market is heavily weighted to retirees and holiday homes. With around 34 % of the population being over 65. It would also appear that a large number of the 550 occupied dwellings are retirees whilst the 500 unoccupied dwellings would suggest a large number of holiday homes. For the 16 year period prior to the Global Financial Crisis in 2008 the average turnover of property in Augusta was 83 sales per annum. Since then it has dropped to an average of 31 sales per annum. As a result of this huge decline in sales and the fact that the normal levels of new listings become available each year, the number of properties currently on the market is abnormally high at 171 - of which 100 are houses or units. The Silver Vines retirement village in Margaret River encountered price resistance when Stage 3 was launched with prices around $400,000. The Silver Vines development is considered to be very dense and there are no double garages – a preference for potential purchasers. The December 2013 McCrindle Baynes national study of the retirement village industry identified the following information: o For new village entrants, 8% were under 65 years of age, 17% were aged 65 to 69, 20% were aged 70 to 74, 54% were aged 75 or older and 32% aged 80 or above. o More than half (56%) of the village residents moved more than 10 km from their previous home to their current village residence. 37% moved more than 20 km and 22% moved more than 50 km. 4 | P a g e Business Case Augusta Lifestyle/Retirement Village May 2014 o The top 3 reasons village residents chose their particular village (Pull factors) were because they could stay independent (87%), safe environment and emergency support (87%), and village facilities (87%). Closely matched was maintenance on site (86%). o Recent village residents are mostly satisfied that their expectations have been met, with 73% stating they were ‘extremely satisfied’ or ‘very satisfied’. This increased to 94% with ‘somewhat satisfied’. Just 2% stated they were ‘Not satisfied at all’ o Perhaps most importantly for an age group that is generally 75 years or older, 30% stated their ‘overall happiness and life satisfaction’ had increased significantly since moving into the village with a further 29% stating it had increased slightly – a total of 59%. o 48% of recent residents had a significant health incident prior to moving to the village, that health incident either somewhat or strongly influenced their decision to move into the village o Almost all residents funded their village home by selling their previous family home (88%). 5 | P a g e Business Case Augusta Lifestyle/Retirement Village May 2014 1.1 INTRODUCTION The township of Augusta is located on the south-west coast of Western Australia, approximately 310 km’s south of Perth and 40km south of Margaret River. The township is a popular retirement destination and has a proportionately older age profile. The Shire of Augusta Margaret River has identified the potential need for a lifestyle/retirement village to allow both ageing in place of existing residents and to accommodate the needs of people in the broader region who seek to live in an attractive and iconic setting with a variety of recreational opportunities. The Shire previously commissioned a feasibility study for the potential lifestyle development.