Australia's retirement living sector has strong, sustained demand, and not enough supply to meet it. National occupancy rates are sitting at around 96%, new independent living unit completions are falling short of what the ageing population needs, and rising construction costs are making it harder to get projects off the ground. For operators, not-for-profit providers, and purpose-driven developers working in this space, that appears to be the environment until at least 2050.
Why is demand for retirement living growing so quickly?
Australia's population is ageing, at scale, and that is not going to change.
Australians aged 65 and over made up around 17% of the population in 2022. That figure is projected to reach approximately 23% by the early 2060s. The 65–84 age group is expected to more than double over the next four decades. The 85-plus group is expected to more than triple.
According to the Australian Bureau of Statistics, just over 800,000 Australians intend to retire in the next five years, with nearly 300,000 planning to do so within two years.
Why retirement living, specifically?
For many older Australians, a retirement village or independent living community makes financial sense and not just lifestyle sense.
Between 2014 and 2023, residential dwelling prices across Australia rose by around 66%. Over the same period, according to JLL's 2024 Seniors Living research, retirement village unit prices rose by around 49%. That gap has made retirement living comparatively more affordable.
Many older Australians own their home outright, which means they have significant assets, but their day-to-day income is limited, often relying on the age pension or a modest superannuation draw-down.
Having no or a limited income means they are unable to service a mortgage facility. Selling the family home and moving into a retirement village or independent living unit can free up capital, reduce living costs, and provide a secure, community-based place to live. The financial case for making that move has strengthened over the past decade, and it is unlikely to weaken.
What does the supply gap actually look like?
Demand is growing but supply is not keeping pace.
According to research on Seniors Living undertaken by JLL, approximately 7,600 new independent living unit (ILU) completions are needed per year just to maintain the current penetration rate of 5.7% through to 2030. Forecast delivery sits at only around 7,200 new ILUs by 2027, and a large portion of the existing pipeline is still in early planning or development application (DA) stages. Actual delivery is likely to fall short of even that figure.
The consequences are visible on the ground. Older Australians looking to move into a retirement village are finding:
- Fewer available homes at any given time
- Longer waitlists at established villages
- Rising entry prices as demand outstrips supply
This is not a future problem. National occupancy is sitting at approximately 96%, which is close to the effective ceiling of full occupancy. Well-located, well-designed projects have genuine long-term viability. The challenge is getting them built.
How is the retirement living sector changing?
Alongside the growth in demand, what providers are building and how they are operating is shifting.
- Care integration is becoming more common: Residents increasingly expect to be able to age in place within their retirement living community, rather than having to relocate when their needs change. Operators are responding by embedding care options within village models, which includes care suites, home care service access, and transition pathways to residential aged care. The Federal Government's Shared Care trial, which pools Home Care Package funding across retirement living environments, is expected to accelerate this further when it commences.
- Vertical development is increasing: In urban and coastal markets where land is constrained, developers are building upwards rather than outwards. This brings different design and delivery considerations compared with traditional village formats.
- Land lease communities are gaining ground: Manufactured housing estates (where residents own their home and lease the land) are increasingly accepted as an accessible, affordable model for older Australians who value independence within a like-demographic community. Institutional capital has followed, with significant pipeline development underway across Victoria and Queensland.
- Independent living remains dominant: Despite the growth of other models, independent living continues to hold close to 60% of market share in the seniors living sector. Most older Australians want to maintain independence for as long as possible, and the design and delivery of retirement living needs to reflect that.
- Longer life expectancy is changing how long people stay: According to the PwC/Property Council Retirement Living Census, the average retirement village resident is now 81 years old, enters at 75, and stays for eight to nine years. Longer tenures mean slower turnover of existing stock, adding further pressure to an already undersupplied market, and raising design questions about how units accommodate changing needs over time.
For context on how retirement living sits within the broader spectrum of seniors housing, our blog on aged care project delivery covers the design and delivery considerations specific to residential aged care.
Where is housing project feasibility being tested?
Strong occupancy does not automatically mean projects are easy to get off the ground. Right now, the numbers are genuinely difficult in many markets.
Here is what the cost gap looks like in practice:
That gap - between what sites are acquired for and what it costs to build - has to be bridged by the project's revenue over time. With construction costs moving well ahead of acquisition pricing, feasibility modelling needs to be more rigorous than it might have been in 2020.
CBRE's H2 2025 Lender Sentiment Survey identified feasibility as the single most important challenge facing the lending environment in 2026. Lenders noted that greenfield retirement living projects face extended timelines, slower occupancy ramp-up, and higher exposure to construction risk. All of this affects how they assess and price finance for these projects.
Planning approvals add further pressure. Timelines remain extended across most states, and the proportion of the pipeline sitting in early DA stages means that headline supply figures consistently overstate what will actually be delivered.
This is not a reason to walk away from retirement living development. It is a reason to make sure feasibility assumptions are built carefully, tested against current market conditions, and carried through into procurement and delivery decisions.
Our blog on the difference between a feasibility study and a business case sets out how to structure that thinking before committing to a development pathway.
How MakeSpace supports retirement living and independent living delivery
The opportunity in retirement living is real and long-term. The demographic fundamentals are not going to change, and the supply gap is not going to close without sustained, well-executed delivery.
What we see in this sector is that the difference between a viable project and a difficult one often comes down to decisions made early - how feasibility is structured, how procurement is managed, and how delivery risk is identified before it becomes a problem on site. These are exactly the areas where experienced housing advisory support makes a practical difference.
MakeSpace works with retirement living operators, not-for-profit providers, and purpose-driven developers who are navigating these challenges. We support retirement living and aged care projects from early feasibility and procurement strategy through to delivery and handover, bringing sector knowledge and delivery discipline to projects where the margin for error is thin and the outcomes for residents matter.
If your organisation is planning or progressing a retirement living or independent living project, we are always open to a conversation about the delivery considerations.
Sources: JLL Seniors Living — One Piece of the Living Puzzle (August 2024); Australian Bureau of Statistics, Retirement and Retirement Intentions Australia 2024–25; IBISWorld Retirement Villages in Australia (2025); CBRE H2 2025 Lender Sentiment Survey; Oxford Economics, Australia's Robust Fundamentals for Retirement Living.
FAQs
What is the current occupancy rate for retirement villages in Australia?
National occupancy in Australian retirement villages is sitting at approximately 96%, based on 2024 and 2025 market data. This is close to the effective ceiling of full occupancy and reflects a combination of strong demographic demand and an undersupplied pipeline of new independent living units. For providers and developers, it signals genuine market need, but high occupancy alone does not guarantee that a new project will be financially viable without careful feasibility and delivery planning.
How many new retirement living units does Australia need each year?
JLL's 2024 Seniors Living research estimated that approximately 7,600 new independent living unit completions per year are needed through to 2030 just to maintain the current penetration rate of 5.7%. Forecast delivery of around 7,200 units by 2027 falls short of that, and with much of the pipeline in early planning stages, actual completions are likely to be lower still. The gap between supply and need is one of the clearest signals of opportunity - and delivery challenge - in the sector.
What is the difference between retirement living and residential aged care?
Retirement living, including retirement villages and independent living communities, is designed for older Australians who are largely independent and want to live within a like-demographic community, often with lifestyle amenities and some support services available. Residential aged care provides 24-hour personal and clinical care for people who can no longer live independently. The two are distinct models with different regulatory frameworks, funding structures, and design requirements, though care-enabled retirement living is increasingly blurring the line between them.
Why is retirement living project feasibility so difficult right now?
Construction costs in retirement living and independent living projects now exceed $500,000 per bed in many markets, while acquisition pricing has typically sat between $200,000 and $350,000 per bed. That gap, combined with extended planning approval timelines and slower pre-sales or occupancy ramp-up for greenfield projects, is putting pressure on financial modelling across the sector. CBRE's H2 2025 Lender Sentiment Survey identified feasibility as the most important challenge facing the lending environment in 2026. Projects that proceed need strong assumptions, realistic programs, and disciplined delivery planning from the outset.
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