24 June 2019
The price of new seniors housing is being slashed by more than $100,000 under an innovative shared equity initiative, which will be closely watched by State Governments around Australia.
Construction has begun on the Cherry Glades estate at Manjimup in south-western Western Australia. The development will eventually include 50-60 two and three bedroom homes.
Under a Western Australian Government scheme, eligible low income seniors will be able to purchase a minimum 65 per cent equity share of a home in the estate. The Department of Communities will retain the remaining equity 35 per cent share as a silent partner.
The shared equity initiative will be accessible to those over the age of 65 with incomes under $49,900 per annum and with less than $332,000 in total net assets for singles or $412,000 for couples.
In addition, the scheme is targeted to seniors with a superannuation lump sum payment or equity in a current home who do not require a loan to purchase the minimum 65 per cent share in the new home.
The government’s 35 per cent equity share effectively brings down the price of 2-bedroom homes from $250,000 to $162,500 (a discount of $87,500) and 3-bedroom homes from $289,000 to $187,500 (a discount of $101,500).
The Western Australian Government says that, if the scheme is successful, it may be replicated in other developments across the State.
"Cherry Glades is designed to allow Manjimup seniors to age in place in their community by providing affordable, age-friendly housing options close to services and amenity,” said Western Australian Housing Minister Peter Tinley.
"The innovative, new co-ownership scheme that we are exploring is a first for WA and will mean significantly lower upfront costs and reduced financial stress for eligible seniors.
"Cherry Glades will be a safe and lively community, providing a range of appropriate housing choices in different sizes and styles that are high-quality, secure and easy to maintain."
Cherry Glades is a collaboration between the Western Australian Department of Communities and the Shire of Manjimup, with support from the State Government's Royalties for Regions program and the South West Development Commission.
Pindan Constructions Pty Ltd is building the first stage of Cherry Glades; six three-bedroom, two-bathroom homes, and three two-bedroom, two-bathroom homes.
On 9 June, Greg Cash, the Assistant Director General Commercial Operations at the Western Australian Department of Communities told Downsizing.com.au: “Marketing for the co-ownership scheme has only recently commenced and the Department is awaiting data regarding buyer interest.”
WA taking a progressive approach with seniors housing
Western Australia is one of the more forward-thinking States in Australia when it comes to working to deliver affordable seniors housing.
The State is currently developing a Seniors Housing Strategy. The main focus of the Strategy will be to improve access to affordable and appropriate housing for current seniors who are on low-to-moderate incomes and have limited access to assets. This includes people who have already retired, and people aged 55 years and over who are approaching retirement.
The State has also developed new 'micro lot' housing as a more affordable option for Perth-based downsizers and is considering introducing a downsizing stamp duty discount.
The Western Australian shared equity scheme is sure to be closely watched by other State Governments across Australia, which are also grappling with the issue of how to accommodate an increasing number of low income seniors.
Across Australia, it is difficult to find examples of similar government-backed shared equity schemes.
The ACT Government has one scheme, but eligibility is limited to social housing tenants.
By Mark Skelsey, News Editor at Downsizing.com.au. Email Mark at [email protected]