Retirement in 2026: A Market at a Crossroads

A sector reshaping itself around a changing Australia

Retirement living in 2026 is undergoing its most significant transformation in decades. Demographics are shifting, lifestyle expectations are rising, and financial clarity is more important than ever. The PwC–RLC Retirement Census 2024 paints a clear picture: demand is accelerating while supply struggles to keep pace, reshaping how Australians approach downsizing.

For many households navigating this landscape, the motivations are deeply personal — and reflect the diverse faces of today’s downsizers.

Demand rising, supply tightening

Australia’s over-75 population is expanding rapidly, and retirement villages remain one of the few purpose-built housing models designed specifically for ageing well. But supply is constrained. National occupancy sits at around 96%, leaving very few available homes at any time. Only 7,200 new ILUs are forecast to be delivered by 2027 — far below demand. Australian Bureau of Statistics

For some, like Jenny and Paul (73 & 74), this limited supply adds urgency. They plan to retire within the next year and want to avoid financial stress after years of mortgage pressure. “We don’t want to rush,” Jenny explains, “but we also don’t want to miss out.” Their experience mirrors that of many Australians in the 6–12 month decision window.

By contrast, Sue and Greg (57 & 64) are early researchers. They aren’t ready to move yet — they’re still travelling and working — but they’re planning two to five years ahead. For them, the supply crunch means they are starting their search earlier, giving themselves more time to secure a village that aligns with their future lifestyle goals.

Affordability remains stable — but complexity increases

One of the most reassuring findings in the PwC data is that ILUs remain at 59% of local median house prices, a stable affordability ratio that enables many retirees to release equity from family homes. But affordability now has more layers than ever.

Ongoing fees have risen with inflation. DMFs can vary dramatically between villages. And the Age Pension assets test — including the $258,000 “extra allowable amount” — impacts whether a resident is treated as a homeowner or non-homeowner.  Real Estate Assets

For Claire, 68, recently divorced and finally ready to consider a new chapter, the fear of making a financial misstep is real. “I know I need to move, but what if I choose wrong?” she says. 

Personas like Claire crave independent, jargon-free information — and tools such as TrueCost TrueCost Launch: A New Way to Downsize with Confidence, which explain fees, equity outcomes, and pension impacts in plain English, can be transformative.

“2026 will reward the informed and the prepared — especially as financial clarity becomes non-negotiable.”

The rise of new lifestyle expectations

The retirement villages of 2026 look very different from those of a decade ago. PwC highlights the growing dominance of vertical and mid-rise developments, which now represent more than half of upcoming village pipelines. These designs are increasingly popular among Lifestyle Seekers like Sue and Greg who prioritise proximity to cafés, gyms, walking paths, and cultural precincts.

Meanwhile, Lucy and John (65 & 70) — one semi-retired, one newly retired — are balancing competing desires. John wants to stay near family; Lucy dreams of a coastal lifestyle. For couples like them, the shift toward mixed urban–coastal development models is ideal: more choice in desirable locations that keep family, lifestyle, and convenience aligned.

Vertical villages also maximise land use in tightly held suburbs and often include concierge-style services, wellness centres, rooftop gardens, and indoor–outdoor communal spaces — appealing to a broad range of downsizers.

Integrated care becomes essential

Perhaps the most significant trend shaping 2026 is the explosive rise in integrated home care within villages. PwC reports that 79% of retirement villages now offer regulated home care, transforming retirement living into a long-term, flexible option that reduces the need for future relocation.

This is particularly relevant for personas like Ruth (78), widowed and managing declining health. She seeks a community where she can maintain autonomy but have support when she needs it. Integrated care means she can transition gradually as her needs increase.

For Anna, 55, who is researching for her ageing father, the presence of on-site care is often the deciding factor. She wants transparency and reassurance — especially around the difference between care services, retirement villages, and aged care homes. The clearer villages are, the more confidence families like Anna’s feel in the process. 

The profile of the modern downsizer

Across all personas, 2026 buyers share key traits:

• They seek certainty — financial, emotional, and lifestyle.

• They want community, not isolation.

• They value amenity-rich environments.

• They prefer ageing in place rather than moving multiple times.

• They increasingly expect digital tools and transparent reporting.
  

The one-size-fits-all model is gone. The modern downsizer is informed, research-driven, and highly attuned to quality.

A year defined by preparation

2026 is not a year for reactive decision-making. With supply tight and expectations high, downsizers who start early — like Sue & Greg or Lucy & John — will secure the best outcomes. But even those in the 6–12 month window can make confident decisions if they arm themselves with clear financial modelling and village comparisons.

The opportunities in 2026 are abundant. The key is clarity — and confidence.