WAITING LISTS ARE NOT WHAT THEY USED TO BE

By Trevor Joseph, Chief Executive Officer, Methodist Homes for the Aged

June, 2011

Retirement villages have always been known to have long - sometimes very long – waiting lists before occupation of a cottage or flat is possible.  It was not unheard of to hear people saying that they had to wait up to ten years before getting occupation.  But, things are changing, and there are a number of reasons for this.

Retirement villages have not escaped the effects of the economic climate, and so it is quite possible for a recent addition to a life right waiting list to get occupation much quicker than would originally have been expected. The reason for this is that people ahead on the list may not be able to sell their existing home at all or they may not be able to get the value for the property that they believe it to be worth.  The residential property market is tough, and prospective retirement village residents are more often than not dependent on being able to liquidate their primary residence to be able to invest in their new lifestyle.

People who have been on a waiting list are often prepared to forego their right to access because they feel that they are still not ready to make the move.  They had the foresight to put their name on their preferred list very early on, and will remain on the list, and only exercise their right once the timing is right.  Or, they may be waiting for a very specific unit or location within a particular village.

It is not uncommon for prospective residents to place their names on multiple waiting lists and once they have found suitable accommodation, they no longer have the need to be on the other waiting lists, which then instantly become shorter.

Then there is the phenomenon of the recent substantial increase in the number of private developers who are entering the market of retirement villages, often because it is seen to be a market where the demand considerably exceeds the supply.  So they see this sector of the residential market to be one of considerable opportunities.  As more private villages are erected, so the pressure on the long established villages’ waiting lists is further reduced.

So, sometimes it happens that an available unit has to be placed on the open market because the village waiting list has been exhausted and there are no takers for a unit.  This was unheard of in years gone by.

Demand for reasonably priced rental units by people who cannot afford a life right or full title investment continues unabated.  Here the waiting lists do just get longer and longer.  Quite simply, returns on new buildings are such that it does not make economic sense to be putting capital into an underperforming asset.  Private developers will not enter this market.  The stock of rental units is not increasing but the number of people requiring this type of accommodation does increase.  As time goes on, the problem is going to be compounded.

It is never too late, and no one is too young or too old, to put his or her name on a waiting list.

None of us can predict what is going to happen to us in the future.  We never know how our circumstances are going to change.  Often the completely unexpected happens.  And, then what?  In the event of a change in circumstances, there is nothing worse than not having made plans for your future accommodation requirements?

Being on a waiting list is like having an insurance policy – and probably the best value for money one that you will find anywhere.

In closing, it is important to be aware of the fact that most frail cares do not have significant waiting lists and that it is quite possible to get occupation at relatively short notice.  There are a number of reasons for this, but probably most significant is the fact that people are finding frail care tariffs unaffordable, thereby reducing the demand.  People are also leaving it later and later before taking up occupation. Frail care stays are becoming much shorter than they used to be and in fact frail cares are becoming extensions of hospital medical wards.  Most frail cares rely on taking in residents from the community to maintain occupancy levels, and cannot survive with only taking residents from their own village.