By Arun Yuvarajah, Project Director at MakeSpace - a housing advisory and project delivery for community, affordable and specialised housing providers

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Land lease communities (LLCs) have moved from the fringes of Australian residential property into one of the most actively invested asset classes in the country. In a land lease community, residents purchase the physical dwelling but lease the land from the operator. This structure removes stamp duty, eliminates exit fees for most operators, and allows residents to keep 100% of any capital gains when they sell. For the growing cohort of older Australians seeking to downsize without sacrificing financial security or independent living, the LLC model is increasingly the answer. For developers and investors, it is one of the most compelling development opportunities in the seniors living sector.

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What is a land lease community?

The core distinction between an LLC and a traditional retirement village comes down to how the transaction is structured and what the resident actually owns.

In a traditional retirement village, residents hold a long-term lease or license over their unit. They typically pay an entry price below local market value and a Deferred Management Fee (DMF) when they leave; usually a percentage of the capital gain, which can vary significantly by operator and is not a regulated figure. Capital gains are often shared with the operator rather than retained in full by the resident.

In a land lease community, the financial structure is fundamentally different:

Source: CBRE Land Lease Communities Report

Note on exit fees: Most LLC operators do not charge an exit fee, and the no-exit-fee structure is a defining feature of the authentic LLC model. However, not all operators have operated this way historically. In July 2025, VCAT President Justice Ted Woodward ruled that Lifestyle Communities' DMF exit fee clause was illegal and void, subject to appeal. This ruling reinforces that exit fees are not consistent with the LLC model and sets an important legal precedent for the sector.

The removal of stamp duty and council rates, combined with no exit fee and full capital gains retention, creates a materially different financial outcome for the resident and better housing outcomes for older Australians seeking to preserve wealth in retirement. For a baby boomer selling a family home worth $1.2 million and moving into an LLC priced at $700,000, the transaction frees up significant capital while preserving the ability to benefit from future dwelling price growth.

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Why is the land lease community model growing?

The growth of land lease communities reflects a structural demographic demand and a generational shift in consumer expectations.

With 150,000 people entering the over-65 cohort every year in Australia, approximately 2,500 new occupied LLC sites are needed annually just to maintain the sector's current penetration level. The LLC penetration rate sits at just 1.0–1.5% of the 55–85 age group, well below the 5.0% penetration for retirement villages and the 5.2% for aged care among those over 85. The room for growth is significant. The 75-plus population is projected to grow from 2.1 million today to 3.2 million by 2035, and the demand is structural.

Consumer expectations are also reshaping the sector. Baby boomers entering retirement are not looking for institutional care or a care-only environment. They want independent living with community, lifestyle amenities, and a financially sensible way to deploy their home equity. Modern LLC developments support ageing in place by designing communities where residents can access care services over time without leaving their home, providing a genuine care continuum from independent living through to supported care as needs evolve.

The shift from an affordable housing option to a lifestyle and retirement community choice is driving a meaningful expansion of the LLC's appeal. According to CBRE's Pacific Market Outlook 2026, homes in newer LLC communities are already trading at premiums to nearby freehold properties in some markets, a clear signal that the model has moved well beyond its origins as a lower-cost alternative.

Newer LLC designs typically range from $700,000 to $1.2 million. Older communities typically range from $400,000 to $800,000. The weighted average home price across major operators reached approximately $606,000 as of mid-2024, with premium operators like Stockland averaging $707,000. CBRE data confirms approximately two thirds of LLC communities feature homes trading at a 10–70% discount to comparable traditional housing in the immediate area, but around one quarter now trade at a premium, reflecting how far the lifestyle positioning has shifted.

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Where are land lease communities concentrated in Australia?

Sound housing development demand analysis is critical in this sector. Demand is not uniform across Australia, and the right location is one of the most important development decisions an LLC operator makes.

Queensland dominates the national landscape, accounting for approximately 47% of national LLC supply. New South Wales and Victoria each hold approximately 23%, with Western Australia at 5% and South Australia at 1%. Queensland's dominance reflects its concentration of lifestyle-oriented retirement markets and strong internal migration from interstate retirees who are usually seeking sunnier skies. Communities spread across major regions in Queensland including:

• Sunshine Coast: 16 communities
• Gold Coast: 10 communities
• Brisbane region: 34 communities

NSW growth is concentrated in the wider Sydney region (14 communities), the Mid-Coast (10), and North Coast/Tweed (12). Victoria's activity is centred on metropolitan Melbourne (18 communities) and Geelong (6).

The national sector is consolidating rapidly. The top five operators already control approximately two thirds of current and under-development LLC sites across land lease communities in Australia. The major players are Hometown Australia, Stockland Halcyon, Ingenia Communities Lifestyle, GemLife, and Living Gems.

GemLife listed on the ASX in July 2025 with a $1.6 billion valuation and a development pipeline of approximately 9,836 sites across 32 communities in Queensland, NSW, Victoria, and South Australia, making it one of the most significant capital market events in the sector's history. Ingenia Communities reported 258 new home settlements in the half year to December 2024, up 47% on the prior corresponding period. Both operators have significant Queensland pipelines and are actively expanding into regional markets.

"Across land lease communities and retirement villages, the common theme is scarcity."  Marcello Caspani-Muto, Director, Australian Healthcare and Social Infrastructure, CBRE, April 2026

In February 2025, GemLife received approval for Australia's first vertical land lease community, a $450 million low-rise apartment project at Currumbin Waters on the Gold Coast, signalling that the model is adapting to supply-constrained urban markets where traditional greenfield development is not an option.

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What does the investment case for LLC development look like for developers and investors?

The LLC model offers a two-phase financial profile that has become increasingly attractive to institutional capital as a property investment in Australia's seniors housing sector.

In the development phase, a build-to-sell cycle typically lasting two to five years, new LLC projects generate development returns of 16–20%, realised primarily through home sales to incoming residents. Development EBITDA represents approximately 60% of total EBITDA for major LLC operators, meaning most earnings are currently generated through new development rather than ongoing management.

Once a community reaches stabilised occupancy, the model transitions to annuity-style income through recurring site rent. Stabilised yields typically range from 5.0% to 5.75%, with site rent providing a highly predictable, low-vacancy income base that scales with CPI or market movements. Net operating income margins during the operational phase typically sit between 65% and 75%.

The combination of high development returns and stable long-term yield has attracted a broadening range of housing sector investment. At least ten transactions exceeding $100 million have occurred across LLCs and retirement villages since 2021. The broader living sector captured $2.175 billion in transactions in the first half of 2025, representing 13% of the total commercial property transaction market, with superannuation funds, sovereign wealth groups, and high-net-worth investors all increasing exposure.

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What are the risks and delivery constraints in land lease community development?

The sector's growth trajectory is strong, but careful project management across planning, regulatory, and weather variables is essential in LLC development.

In Queensland, development timelines have been affected by extreme weather events alongside typical planning and DA bottlenecks. In Victoria, the regulatory environment has shifted materially. In July 2025, VCAT President Justice Ted Woodward ruled that Lifestyle Communities' DMF exit fee clause was illegal and void, a decision Lifestyle Communities is appealing. The company's market capitalisation fell from approximately $1.53 billion at the time of the ABC 7.30 report in July 2024 to approximately $600 million by mid-2026. Victoria's Minister for Consumer Affairs has since signalled reforms to standardised site agreements, which would affect business model economics for operators in that state.

Governance and development demand analysis matter here in ways that go beyond the financial model. Regulatory risk, particularly in Victoria, needs to be factored into feasibility assumptions before sites are acquired or capital committed. The Lifestyle Communities situation is a reminder that legal and operational compliance underpins the entire value proposition of the LLC model. Where that proposition is honoured, the model works for residents and operators alike.

Western Australia and South Australia together account for only 6% of national LLC supply, partly reflecting the later stage of market development in those states. Project risk also includes the specific challenges of bringing communities online: managing DA processes, infrastructure connections, weather, and the staged build-and-sell cycle that characterises LLC development.

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How MakeSpace supports retirement living, land lease community, and aged care development

The LLC sector is moving fast. The demographic demand is structural, the capital interest is significant, and the pipeline of new communities is growing. Each project is where that opportunity is realised, or not.

For aged care operators, retirement living providers, not-for-profit housing organisations, and purpose-driven developers, translating that opportunity into a viable, well-governed project requires feasibility grounded in development demand analysis, a procurement strategy that accounts for the current builder market, and project governance that keeps timelines on track through to handover and opening day. Getting these right matters in a sector where project complexity is high and the margin for error is thin.

MakeSpace works with retirement living operators and developers across specialised residential accommodation and aged care development, from early feasibility and site assessment through to construction oversight and handover. The LLC model's growth is a genuine opportunity for the sector. Realising it, project by project, is where specialist advisory experience makes a practical difference.

For a broader view of the seniors living sector, including the residential aged care supply gap and what longer life expectancy means for development decisions, our blog on what the demographic shift means for aged care and retirement living development in Australia sets out the full picture. For context on feasibility and delivery considerations specific to retirement living, our blog on the retirement living supply gap and what it means for delivery is a useful companion read.

If your organisation is considering an LLC or retirement living project and would like to talk through the development and governance considerations, please feel free to get in touch.

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Frequently Asked Questions (FAQs)

What is the difference between a land lease community and a retirement village?

In a land lease community, residents purchase the physical dwelling and lease the land, paying no stamp duty or council rates, no exit fee, and retaining 100% of capital gains when they sell. In a retirement village, residents typically hold a long-term lease over their unit, pay a Deferred Management Fee on departure, and may share capital gains with the operator. The LLC model offers a more transparent, wealth-preserving financial structure, a key driver of its rapid growth relative to the traditional retirement village sector.

Why is Queensland the dominant market for land lease communities?

Queensland accounts for approximately 47% of national LLC supply, according to CBRE. The state's concentration of lifestyle-oriented retiree markets, particularly the Sunshine Coast, Gold Coast, and Brisbane region, combined with strong internal migration from interstate retirees, makes it the natural centre of gravity for the sector. NSW and Victoria each hold approximately 23% of national supply. Queensland's development pipeline is also the largest, though timelines have been affected by extreme weather events and planning bottlenecks in some locations.

What returns do land lease community developments generate for investors?

New LLC developments typically generate development returns of 16–20%, realised primarily through home sales to incoming residents, according to CBRE's Land Lease Communities report. Development EBITDA represents approximately 60% of total earnings for major operators. Once stabilised, the model delivers annuity-style income through recurring site rent, with stabilised yields of 5.0–5.75% and net operating income margins of 65–75% during the operational phase. The two-phase return profile, high development returns transitioning to stable long-term yield, is central to the sector's appeal for institutional capital and property investment in Australia.

How do land lease community home prices compare to traditional housing in Australia?

Approximately two thirds of LLC communities feature homes trading at a 10–70% discount to comparable traditional housing in the immediate area, according to CBRE. Around one quarter now trade at a premium, typically in newer resort-style developments in desirable locations. The weighted average home price across major operators reached approximately $606,000 as of mid-2024. Newer LLC designs typically range from $700,000 to $1.2 million; older communities from $400,000 to $800,000. LLC residents also benefit from no stamp duty and no council rates, compared to traditional freehold property purchases.

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Sources: CBRE — Land Lease Communities; CBRE — Pacific Market Outlook 2026; CBRE 2026 Seniors Living Report via Commo; ULI Australia 2025; JLL — Australia's Living Sector: Growth, Resilience and Capital Attraction (October 2025); GemLife — Australia's first vertical land lease community approved (February 2025); GemLife ASX listing, The Weekly Source (July 2025); The Weekly Source — VCAT Lifestyle Communities ruling (July 2025)

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Last updated on August 1, 2026