18 June 2019
The peak body for retirement village developers appears ready to fight a proposed new mandatory unit buyback reform, because of claims the policy would be too strict and impact both developers and residents.
In a post published on 17 June, the Property Council of Australia stated that it expected that the NSW Government would shortly release a discussion paper on the subject.
In February 2019, in the lead-up to the March election, the NSW Government indicated it was going to force retirement village operators to buy back unsold units within six months of the departure of retirees in metropolitan areas, or 12 months in regional areas.
At the same time, retirement living operators would be prohibited from charging for general services 42 days after a resident vacates their unit or apartment.
“The buyback proposed in NSW would be by far the strictest imposed across Australia,” the Property Council’s post says. “The Property Council has significant concerns about the impact this proposal will have on operators and on values for continuing residents.
“A detailed assessment of these impacts is being developed as part of our ongoing efforts to show government the likely consequences that will arise from the implementation of its policy.”
“The Property Council has met with the new Minister for Innovation and Better Regulation, The Hon Kevin Anderson MP, to discuss this issue and has now had several meetings with the Department of Fair Trading to discuss the implications of the government’s announcement.
“The Property Council has also met on a number of occasions with the Retirement Village Residents Association to discuss this matter.
“Over the coming weeks we will reach out to the wider NSW industry to seek assistance in pulling together further data to help build the case for demonstrating the impact of the proposed policy on village owners/operators and residents.”
Mandatory buyback reforms have recently commenced in Queensland and South Australia. There were media reports that, on the first day the reform commenced in Queensland, operators had to pay $30 million to buy unsold units.
Around 80 per cent of NSW retirement villages offer voluntary contractual buy back guarantees, where the operator will purchase back the unit within a set time limit if a buyer is not found.
The NSW Government’s announcement would appear to be a step towards extending this level of protection to all retirement villages, and to create a consistent minimum time period across the State, to give village residents peace of mind and greater security.
By Mark Skelsey, News Editor at Downsizing.com.au. Email Mark at [email protected]