The Affordability Equation in 2026: Why Costs Matter More Than Ever

Affordability remains strong — but the decisions are more complicated

For years, retirement villages have offered one of the most stable affordability stories in the Australian property landscape. The PwC–RLC Retirement Census 2024 confirms that, nationally, Independent Living Units (ILUs) remain priced at 59% of local median house prices, enabling many older Australians to release equity and reduce financial stress.

Yet 2026 brings a more nuanced picture. While ILU prices remain steady, ongoing fees, DMF structures, pension implications, buyback timeframes and refurbishment conditions now form a complex affordability equation that retirees must navigate.

For many downsizers, the financial decision is no longer about “Can I afford to move?” but rather “What will it cost me over time — and how much will I keep?”

This is where personas across the Downsizing audience face very different motivations and challenges. https://www.dss.gov.au/

The planners: preparing early to optimise equity

For Sue and Greg (57 & 64), still working and planning 2–5 years ahead, affordability is not defined purely by price. They're financially comfortable, but they want certainty. Their primary question is:

“If we downsize in a few years, how can we maximise equity for travel and lifestyle?”

For personas like them, 2026 affordability is about scenario planning: comparing villages, understanding DMF ranges, and forecasting 10-year financial outcomes. TrueCost modelling helps this segment see not only the entry price, but long-term equity retention and ongoing costs.

The fence-sitters: weighing lifestyle vs. financial caution

Lucy and John (65 & 70) sit in the common “unsure” category. One wants coastal lifestyle; the other wants to stay near family. They’re not under financial pressure — but they’re not ready to gamble either. The hottest downsizing locations in Australia right now

Their affordability questions reflect this hesitation:

• “Will a coastal village cost more long term?”

• “How do ongoing fees differ between regional and metro villages?”

• “Does a higher DMF always mean a better lifestyle?”

PwC data shows ongoing fees have increased modestly with inflation, but vary significantly based on amenity levels. Lifestyle villages can offer strong value, but fees may be higher — an important consideration for couples balancing long-term budgets. 

Those approaching retirement: clarity and caution

For Jenny and Paul (73 & 74), who are planning a move within 6–12 months, affordability is a pressing issue. They want financial stability after retirement and need to understand:

• What portion of their home equity they can keep

• Whether a village will affect their pension

• How DMFs will impact the money they can pass on to children

The PwC Census highlights a growing need for tools that simplify these complex financial considerations. Opaque contract structures have historically caused confusion — especially for buyers like Jenny and Paul, who value clarity above all. Assets test for Age Pension

This is where financial modelling tools like TrueCost help retirees visualise long-term outcomes, not just upfront fees.

“For buyers in 2026, affordability isn’t about the entry price — it’s about every cost that follows.”

The vulnerable buyers: avoiding financial missteps

Claire (68), recently divorced, is among the most financially vulnerable personas. She has equity but worries deeply about making the wrong choice. For personas like Claire, affordability challenges often stem from:

• Difficulty comparing DMFs

• Confusion around exit entitlements

• Anxiety about future care needs

• Fear of refurbishment deductions affecting equity

This buyer group requires not just transparency, but reassurance. Editorial content must empower them with unbiased, practical explanations — exactly what your 2026 content series aims to deliver.

The care-sensitive segment: affordability tied to health

For Ruth (78), health is declining and living alone is no longer safe. Her affordability questions are fundamentally different:

• “Will I need paid home care soon?”

• “How do service fees work?”

• “What’s the cost difference between village-based care and home-based care?”

PwC reports that with 79% of villages now offering regulated home care, the affordability equation extends beyond housing costs into support costs. A village with integrated care may reduce long-term expenses compared with private home care.

Pension implications: a major part of affordability in 2026

The $258,000 extra allowable amount used to determine homeowner status under the Age Pension assets test remains one of the most misunderstood affordability factors. For many personas — especially Jenny & Paul and Claire — pension eligibility significantly affects weekly cost of living.

Retirement contracts where entry payment sits near the threshold can alter:

• Whether the buyer is treated as a homeowner

• Whether they receive Rent Assistance

• Whether part of their home contribution is exempt

This is why 2026 demands more financial literacy than ever.

Why transparency tools are defining affordability

2026 represents a turning point: downsizers expect — and deserve — clearer financial structures. TrueCost, PwC argues, is timely because it allows buyers to:

• Compare villages on financial outcomes

• Understand equity retention

• Forecast exit payments

• See buyback timeframes in real terms

• Assess pension impacts instantly

For every persona — planners, fence-sitters, cautious buyers, vulnerable buyers and family researchers — transparency is no longer optional. Retirement Village Payment Options | Downsizing.com.au

It is part of the affordability equation itself.