Picture a leafy retirement village with a community centre, happy hour drinks, and neighbours who become friends. It’s the idyllic vision of retirement living that many older Australians are sold – a worry-free life of independence, low maintenance and security. But behind the manicured lawns and the promise of a “golden years” lifestyle, a big question looms: are retirement villages actually affordable, or could they turn into a costly trap? As the cost of living rises and Australia’s population ages, more seniors are eyeing these communities as a downsizing option. In this editorial, we’ll analyse the real price of retirement village living – from the complex fee structures to the pros and cons of the current model – and explore why industry experts are calling for a stronger focus on care in our retirement villages.

The Cost of Retirement Village Living​

For anyone considering a retirement village, the first thing to understand is how the costs work – and it can be confusing. Unlike buying a normal house, moving into a retirement village usually involves an ingoing contribution (an upfront payment), ongoing fees while you live there, and often a hefty exit fee when you leave. In practice, that upfront payment often works like an interest-free loan you give to the village operator in exchange for the right to live in the unit. The amount varies widely depending on location and amenities – it could be a modest unit for a few hundred thousand dollars or a luxury villa over a million. On average, ingoing contributions can range from around $300,000 to $900,000 or more, often funded by selling the family home. This is sometimes less than local house prices (more on that later), but you don’t get all that money back when you move out.


Ongoing fees are the next piece of the puzzle. Retirement villages typically charge residents regular fees (weekly or monthly) to cover maintenance of gardens and common areas, on-site facilities, staff, and sometimes services like security or emergency call systems. These fees can range from a couple of hundred dollars a month to several hundred a week, depending on the village and what’s included. For example, one resident noted their village’s service fees were “towards the high end” but covered amenities that suited their needs. It’s important to check exactly what you’re paying for – utilities, council rates, and insurance might or might not be included. And yes, those fees can go up. In fact, some contracts allow operators to raise the service fees to cover budget shortfalls – one resident recounted fees jumping with “the implied threat that if we did not agree services would be cut”. So while you won’t be mowing your own lawn anymore, you’ll still be footing the bill for someone else to do it.


The real sting in the tail, however, often comes when you exit the village. Most Australian retirement villages operate on a model that includes a Deferred Management Fee (DMF) – essentially an exit fee. This is usually calculated as a percentage of your unit’s value for each year of residence, often capped after a certain number of years. A common structure might be around 3% per year, up to (for example) 10 years – meaning if you stay a decade, the operator keeps 30% of the sale price when you leave. Some contracts front-load the fee (one contract charged 8% in the first year alone, then 3% for each subsequent year). The industry considers a 30% DMF over about 10 years “pretty normal”. What does that mean in practice? If you bought into a village for, say, $400,000, living there for a decade might see roughly $120,000 kept as the exit fee (often deducted from the price when your unit is re-sold). Operators may also take a share of any capital gain on the unit’s value (in some contracts the operator keeps capital gains entirely; others might split it with you). And don’t forget refurbishment costs – many contracts stipulate that when you leave, the unit must be refurbished or renovated to a saleable standard, and the cost can come out of your share. There might also be a selling or administration fee. By the time all that’s tallied, you could be walking away with significantly less than what you paid in.



These numbers can be startling. National Seniors Australia’s Chief Advocate, Ian Henschke, has heard many “tales of woe” from families of village residents. One family complained that their relative bought a retirement unit for $1.2 million, and the operator deducted $460,000 in various fees, refurbishment costs and commission when they left. Another case saw an upfront price of $360,000 whittled down to just $170,000 returned – after $190,000 in exit fees and costs – which left the resident without enough to cover an aged care bond for the next stage of life. “My first response was, how does a 70-plus-year-old person make sense of this?” one man said after discovering his sister’s contract included a complex algebra formula to calculate a 35% exit fee. It’s no wonder Henschke warns that when it comes to retirement village contracts, “It’s a ‘jungle’ out there” and seniors absolutely must “read the fine print and seek advice”.

Retirement Villages vs Aged Care Homes: How Do Costs Compare?​

It’s important to distinguish retirement villages from aged care homes (nursing homes), because the costs and what you get are very different. Retirement villages are essentially independent living communities for seniors who are (by and large) able to live on their own. The fees we’ve discussed above cover your accommodation and maybe some services, but health or personal care is not included as a package (though you might arrange in-home care separately). In contrast, residential aged care homes are for people who need a higher level of care and support with daily activities or medical needs. The payment structure there involves regulated fees: many residents pay a hefty refundable accommodation deposit (RAD) – often hundreds of thousands of dollars – or a daily accommodation payment (or a combination of both) to cover their room. (As a benchmark, the average RAD in Australia is around $470,000, and the government sets an upper threshold for these unless special approval is given.) Aged care residents also pay a basic daily fee (capped at 85% of the age pension) and potentially means-tested care fees, but these are regulated and subsidised based on your finances.


In simple terms, moving to a retirement village is more akin to downsizing and buying into a seniors’ community – you’re funding your housing and lifestyle yourself – whereas moving into aged care is partly a care service with government oversight and subsidies for those who need it. If your health declines while in a retirement village, you might bring in home care services (through My Aged Care packages) or, if needs become significant, eventually transition into an aged care facility. This is why it’s critical to consider how much of your nest egg will remain after exiting a village, because you may need those funds to afford aged care later. Sadly, as noted, some retirees have found their village exit payout left them short when it came time for the nursing home bond.



So, are retirement villages cheaper than staying in your own home or entering aged care? It depends on what you compare. Industry groups often argue that retirement village units are a good deal – and on face value, the purchase prices can indeed be lower than regular real estate. For instance, in Sydney the average price of a two-bedroom retirement village unit is about 59% cheaper than the median house price in the same suburb. In dollar terms, that was about $914,000 for a village unit versus $2.24 million for a typical house in those areas. Retirement Living Council executive Daniel Gannon notes this “affordable downsizing” not only helps seniors, but also frees up larger homes for younger families. Across Australia, village prices tend to be lower than comparable houses – one operator pointed out a unit sold for 30% less than the local market price for a house. This is part of the trade-off: you pay less to move in, and in exchange the operator takes an exit fee later to make their profit. In theory, this model should make entering a village easier on your wallet than buying a house, if you’re comfortable with giving up a chunk of the capital growth when you leave.


But does it really save you money in the long run? Critics will rightly say: not necessarily. An investigative analysis by the ABC compared what retirees got back after selling their village units with what they would have gained if they’d simply bought a regular home in the same area, and all 10 cases examined showed the retirement village resident went backwards financially. In one striking example, a Queensland retiree’s contract would see her lose 79% of the money she paid in, over about a decade – meanwhile, houses in the same suburb had doubled in value over that time. This illustrates a key point: retirement villages are not a financial investment in the property market the way home ownership is. They’re more like paying for a service/lifestyle package. The village model “conceals the true cost” of living there through its complicated mix of fees, according to consumer advocates. Put simply, the operator’s share (deferred fees, etc.) often eats up any capital appreciation and then some. So, while you might unlock some equity by selling a $1 million house and moving into a $600,000 retirement unit, years later you could end up with a smaller proportion of that wealth in your pocket.


That said, value isn’t only about dollars and cents; it’s also about what you get for those dollars. This is where we need to weigh the pros and cons beyond just the balance sheet.

Pros: Community, Wellbeing and Independence​

Despite the scary-sounding fees, tens of thousands of seniors genuinely enjoy life in retirement villages and would not hesitate to recommend it. The biggest advantage often cited is the sense of community. Residents are surrounded by peers, which can fend off the loneliness that some experience living alone in the family home. There are usually social activities, clubs, outings and informal get-togethers. In fact, research indicates that compared to those not living in villages, retirement village residents tend to be far more socially and physically active. According to a 2023 study, village residents are on average 41% happier, 15% more physically active, and five times more socially active than their counterparts in the general community. They’re also twice as likely to catch up with family and friends and report significantly lower levels of loneliness and depression. It turns out that having a built-in community of neighbours your age – and facilities like gyms, pools, bowling greens or a community dining hall – can do wonders for one’s wellbeing.



Many villages promote a “worry-free” lifestyle: no more mowing lawns, cleaning gutters or dealing with big home repairs. For older Australians who are healthy enough to live independently but tired of home maintenance, this is a huge plus. As one content resident shared on talkback radio, she was “blissfully happy” not having to do maintenance or gardening, and loved the on-site gym and café where she could meet friends every day. Safety and security are another benefit – typically, villages offer secure environments with staff around or emergency call systems, giving peace of mind to residents and their families. And if a resident’s partner passes away or they’re on their own, they’re not isolated – help or companionship might be literally next door or a quick call away.


There can also be health benefits tied to this lifestyle. With many villages now including or partnering with services like exercise classes, allied health professionals (physiotherapists, dietitians, visiting GPs), or offering wellness programs, residents may stay healthier longer. The social support and activities keep people engaged. Industry leaders point out that this can even have public benefits: retirees living in supportive communities tend to delay or avoid entry into nursing homes, which “leads to reduced interaction with hospitals and GPs” and saves the government an estimated $945 million a year by delaying higher-care admissions. In other words, good retirement village living can help seniors stay fit and independent, aging in place longer and reducing strain on the aged care system.


Another pro is that some retirement villages are starting to integrate more care services on-site (or at least facilitate them), effectively bridging the gap between independent living and aged care. We’ll discuss this trend more shortly, but imagine being able to remain in your familiar unit and community even as you need some help with daily tasks or healthcare – the ideal of a “continuum of care.” Some newer villages or “retirement communities” offer serviced apartments, or are co-located with aged care facilities, so that couples with different care needs can stay near each other and residents can transition more seamlessly if their health changes. The overall idea of retirement villages was once just about lifestyle and “over-55 living”, but increasingly there’s recognition that retirement living can be part of the care continuum.


Finally, let’s not forget the broader benefits that can come with downsizing. Selling the old family home might free up some extra cash (even after buying into the village, many seniors keep a surplus nest egg). Moving to a smaller, age-friendly unit can be liberating – no more bedrooms gathering dust or stairs to climb. And by moving out of their large homes, older Australians may even be helping ease the housing crunch for younger families by putting more three-bedroom houses on the market. “When an older person or couple makes the decision to ‘rightsize’ into a home that is better suited to their ageing needs, they’re injecting a bigger home back into the market for younger people,” notes Mr Gannon of the Retirement Living Council. It’s a classic win-win argument the industry makes: good for seniors, and good for the community at large.

Cons: Fees, Contracts and Care Gaps​

On the flip side, retirement villages have some well-known downsides that give many people pause. Top of the list are the complex contracts and fees we detailed earlier. If you’ve ever tried to read a retirement village contract, you’ll know it’s not a breezy exercise. They can run over a hundred pages of legal and financial terms, covering everything from whether you’re allowed to have a pet to who pays for lightbulbs – but more critically, setting out the financial formula that will apply when you leave. Some contracts even include daunting algebraic formulas to calculate the exit fees. “People don’t really understand what they’re signing up for,” says Dr. Tim Kyng, a retired actuary who built a retirement village calculator to help families make sense of these deals. He found that in most cases, “retirees leave with less than they went in with,” financially speaking. The fact that an actuary felt the need to create a special calculator tells you how hard it can be to compare one village’s fees with another’s. Inconsistent state laws mean disclosure rules vary, and operators each have their own fee structures. Consumer advocates like CHOICE and National Seniors Australia have long argued for simpler, standardised contracts. Indeed, National Seniors is calling for a standard plain-English contract nationwide, noting some contracts stretch over 50 pages and are “not reader-friendly” at all.


The consequence of confusing contracts is that too many people sign on without fully grasping the financial implications. It’s often said that many village residents only truly discover the “deal” when they exit – and realise how much they’re losing. There have been horror stories of retirees feeling trapped because if they wanted to move out after a few years (perhaps the village didn’t suit them, or a spouse passed away), the steep early exit fees would leave them worse off than staying put. As one long-time resident put it, “once you’re in the contract, there’s nothing you can do” – leaving early would’ve been “prohibitively expensive” due to the way the fees were front-loaded. This can especially affect those who, say, enter a village in their early 60s and then have a change of heart. The system, critics say, discourages flexibility – you effectively bet that you’ll stay long enough to make the loss of equity “worth it” for the lifestyle gained.



Another con is what happens after you leave the village. Unlike selling a normal house, where you keep the proceeds and move on, in a retirement village you often have to wait to get your payout until the operator finds a new buyer for your unit. That could mean months (or in a slow market, even longer) where your money is tied up. Some states have introduced laws to force operators to buy back a unit if it hasn’t sold after, say, 6 or 12 months, so that ex-residents or their estates aren’t left hanging indefinitely. But policies differ across Australia. It’s worth checking: if you move out or pass away, do weekly fees continue until the unit is re-sold? In some contracts, yes, the family keeps paying fees on an empty unit – adding insult to injury. These kinds of terms can come as nasty surprises during an already stressful time.


The “care gap” in traditional retirement villages can be a disadvantage too, especially as residents age. A healthy, active 70-year-old might not be thinking about needing help down the track, but by the time they’re 80 or 85, they may require assistance with cleaning, cooking or personal care. Retirement villages are not aged care facilities, so they typically do not provide nursing care or carers for daily activities (beyond maybe a village nurse or visiting GP for very basic support). If a resident becomes too frail to live independently, they may face the difficult upheaval of moving into a nursing home – leaving their village friends and environment behind. According to industry data, about 50% of retirement village residents eventually transition into residential aged care. In other words, moving to a village is not necessarily the last move you’ll ever make. The prospect of having to relocate again in one’s 80s, possibly on short notice due to a health crisis, is a concern for residents and their families.


This leads to another con: limited care integration (so far). While some villages are co-located with aged care or have partnerships with home care providers, many are not equipped to handle residents with high care needs. In a village setting, if you need extra help you might have to organise external home care services, which come at additional cost and coordination. Unlike aged care homes which provide 24/7 staff, retirement villages typically have more limited staffing (perhaps a manager on-site during the day, maybe security at night, but not a team of carers). This can be problematic in emergencies or for those starting to struggle with daily tasks. Families might need to arrange private carers to come into the village. Essentially, the current model often means independence is expected – great when you have it, problematic when you don’t.



Finally, let’s mention the rules and restrictions. Because retirement villages are communal living environments, residents agree to certain rules that wouldn’t apply if they owned a standalone home. These can include rules on pet ownership, parking, whether family can stay over (and how long), whether you can make changes to your unit, and so on. For most people these are minor trade-offs, but it can irk some. The ABC found examples of contracts that even “demand approval for every pet except fish in a tank,” illustrating the level of control some operators maintain. You’re also subject to the business decisions of the operator – if they decide to sell the village to another company, or change what services are offered, residents have little say (though resident committees and state laws provide some protections). When you’ve been king or queen of your own castle for decades, adjusting to being a “resident” under someone else’s management might chafe at first.

Retirement Villages Should Be More “Care-Focused”​

Given the aging profile of residents and the shortcomings in care support, there’s a growing chorus – from experts and even within the industry – that retirement villages need to shift toward a more care-oriented model. The sector is hearing loud and clear that the old model of a “lifestyle village” for spry 65-year-olds is out of step with today’s reality. People are entering retirement villages later in life than they used to. In the 1980s, a village might market itself to the over-55s enjoying early retirement. Now, the average age of someone moving into an Australian retirement village is around 75–80 years. According to a 2024 industry survey, new residents were on average 78.4 years old on entry, and exited at about 86 years of age. That suggests many are treating the village as their “last place of residence” – they intend to stay until they either pass away or truly can’t manage without nursing care. As one analyst quipped, retirement living has come “a long way” from its over-55 lifestyle village roots; it’s now “very much part of the care sector” in practice.


The implication is clear: villages must adapt if they want to properly support these older residents. Grant Corderoy, a senior partner at StewartBrown, which conducts performance surveys of the retirement living sector, argues that providers “have now got to create an environment where the villages provide more care delivery, and move up towards 24-hour care… so that hopefully people can remain in their homes... rather than having to transition to residential aged care”. In other words, the future of retirement villages should look a bit more like aged care – or at least a hybrid of independent living with care services available. This could mean having nurses on-site or on call, facilitating in-home care packages, offering meals or personal care services, and designing units and facilities with aged care in mind (wider doorways, bathrooms with rails, etc. – all the infrastructure to help people “age in place”).



Already, some villages are responding to this. Many older villages (the average village in Australia is about 30 years old) are refurbishing units upon turnover and upgrading community areas to be senior-friendly for more frail residents. Features like step-free entries, emergency call systems, and access to allied health services are becoming standard. “Allied health is a really key component” of delivering care to village residents, Mr Corderoy notes, citing physiotherapy, occupational therapy and dietitians as important services to have available. The industry is also looking at growth: occupancy rates are high (nearly 89% nationally as of 2024, and effectively full in some cities), and demand is expected to soar as Australia’s over-75 population grows. That has operators planning more developments and expansions of services.


The push for care-focused villages isn’t just coming from operators sensing a market need; it’s also a result of broader aged care reforms and consumer expectations. The new Aged Care Act and the “Support at Home” program rolling out nationally emphasise aging at home for as long as possible – which for many could mean aging in a retirement village home. There’s a cultural shift viewing older Australians as consumers with rights and choices, expecting transparency and quality whether they’re in a government-subsidised aged care facility or a private retirement community. Retirement village residents and their families increasingly want the best of both worlds: the autonomy and community of village life, and the reassurance that more help is on hand if health needs change. This trend might blur the line between what we think of as “retirement living” and “aged care.” We may see more hybrid models – for example, villages that allow external care providers in easily, or companies that operate both retirement villages and aged care homes offering priority entry for their village residents if needed. The sector is even discussing voluntary accreditation or standards to ensure villages are safe and supportive environments for very elderly residents, not just resort-like estates for the fit and able.

Balancing Act: Finding What Works for You​

At the end of the day, the decision to move into a retirement village is a highly personal one, with financial, emotional, and practical factors all intertwined. On one hand, you have the promise of an easier lifestyle and a tight-knit community in your golden years – a place where you can have a morning swim, join a craft group, and never worry about mowing the lawn again. On the other, you have to navigate the fine print of contracts, part with a significant portion of your life savings, and accept that your “home sweet home” comes with strings attached, like exit fees and village rules. There’s no one-size-fits-all answer as to whether retirement villages are “worth it.” It truly depends on what you value most.



For some seniors, the peace of mind and social connections are priceless – they’d happily trade away some capital growth for years of happier, healthier living in a village community. Indeed, many residents knowingly accept the financial trade-off: one resident said she “knew exactly what she was getting into” and was “happy to let the operator take the exit fees” in exchange for the enjoyable lifestyle she had there. Her view (and that of many content village dwellers) is that you can’t put a price on the friendships, support, and convenience that a good retirement village offers. For others, however, the loss of financial freedom or the fear of hidden costs is a deal-breaker – they’d prefer to stay in their own home or look at alternatives like downsizing to a smaller apartment or exploring the newer land lease communities (which usually have no exit fees but charge rent on the land you live on, and you retain any capital gain on your home). Those alternatives have their own pros and cons, but they underscore that retirement villages are not the only option.


What’s clear is that if you do consider a retirement village, due diligence is essential. Prospective residents should crunch the numbers (with an accountant or use tools like Dr. Kyng’s retirement village calculator), consult a solicitor who specialises in retirement living contracts, and quiz the village manager on every fee and scenario. Ask: What will it cost me to enter, to live here, and to leave? How are fees can change over time? How is the exit fee calculated and what will I likely get back if I stay X years? Will I still have to pay fees after I depart, and for how long? What happens if I need to go into aged care – does the contract allow a fast payout or some help coordinating the move? These questions might not be fun to ask (or answer), but as the old saying goes, caveat emptor – buyer beware. Transparency is improving slowly, and some states are pushing for better disclosure of all costs upfront, but it often falls on the individual to read that fine print. As Henschke says, despite the rosy brochures with smiling seniors, “the retirement village marketers are usually accentuating the positives” and not always giving the full picture of costs. It’s up to the consumer (and their savvy adult children, perhaps) to balance that picture.


The retirement village sector itself is at a bit of a crossroads. Operators know they need to appeal to a more informed, perhaps more cautious generation of retirees. Moves like the Retirement Living Council’s voluntary code of conduct (introduced in 2020 to encourage plain language contracts and fair practices) are a step, but uptake has been limited and critics call for binding regulation. Meanwhile, calls for national consistency and stronger consumer protections are growing, as organisations like National Seniors lobby for urgent reforms to “better protect older Australians against unfair and incomprehensible contracts, fees, and charges.” The ideal scenario is that over the next decade, retirement villages become more transparent, more care-ready, and continue to build on the aspects that genuinely improve seniors’ lives.


Ultimately, retirement villages do deliver immensely for some people – providing social connection, safety, and a fulfilling lifestyle. They also undeniably come with financial sacrifices and potential pitfalls. So, the question every older Australian (and their family) has to weigh is: Is the promise of carefree community living worth the price tag and the fine print? Or are there better ways to spend our golden years?