Retirement Living and Victoria's Development Facilitation Program

Retirement Living developments offer a naturally affordable housing solution, yet these developments are not property recognised by Victoria’s Development Facilitation Program. With an ageing population and growing demand for downsizing options, is it time for an adjustment to the Development Facilitation Program to better facilitate Retirement Living approvals?

The Victorian Government’s Development Facilitation Program (DFP) is designed to accelerate projects that contribute to the state’s housing supply, affordability, and economic growth. While the program currently supports a range of residential developments, Retirement Living communities remain excluded—despite their inherent affordability and critical role in addressing housing needs for Victoria’s ageing population. Retirement Living developments would be required to pay a 3% cash-in-lieu contribution to affordable housing. This is a cost these projects should not liable for.

It’s time for a policy shift that acknowledges the unique value Retirement Living developments bring to the broader housing market.

Retirement Living Is an Affordable Housing Solution

Affordability is a cornerstone of the DFP, and Retirement Living communities naturally align with this objective. In Victoria, the median price of a Retirement Living dwelling is significantly lower than the median price of a standard residential property. While Melbourne’s median dwelling price sits around $772,000 (CoreLogic HVI February 2025) Retirement Living dwellings typically sell for 57% less than the median in regional contexts and 52% less than the median in a metro context (PwC/Property Council Retirement Census, 2023). This price differential makes these developments an essential component of the affordable housing spectrum, offering older Victorians a viable downsizing option that frees up existing housing stock for younger families. Requiring Retirement Living developments to pay a 3% cash in lieu contribution to affordable housing ignores the contribution they make to addressing affordable housing challenges.

A Supply and Demand Imperative

Victoria’s population is ageing rapidly, with over 20% of residents expected to be over 65 by 2050. This demographic trend underscores the urgent need for more purpose-built, age-friendly housing options. However, the development pipeline for Retirement Living communities faces unnecessary hurdles, including protracted planning approvals and inconsistent local government support. By granting these developments access to the DFP, the government can fast-track much-needed housing supply while ensuring older Victorians have access to secure, community-focused living arrangements in addition to freeing up existing larger homes for younger families. Based on the current rates of delivery there will be a chronic undersupply for decades to come.

Economic and Social Benefits

Beyond affordability, Retirement Living developments generate significant economic and social benefits. They create jobs in construction, healthcare, and aged care services while fostering communities that reduce social isolation among seniors. They also provide an opportunity for in-home aged care services to be delivered at scale and efficiently. This is a benefit that is expanding rapidly, in 2023 61% of operators reported actively providing regulated home care services to residents in the village up from just 30% in 2021. Victorian operators are already leading the way nationally with 88% of villages providing rooms for visiting medical professionals (PwC/Property Council Retirement Census, 2023). Additionally, by enabling more older Australians to downsize, these developments help unlock larger homes for growing families, easing pressure on the broader housing market.

Policy Alignment and the Path Forward

The DFP aims to deliver projects that contribute to affordability, economic recovery, and community well-being. Retirement Living developments align with all these goals. Expanding the program to include them is a logical step that would remove red tape, encourage investment, and deliver high-quality, affordable housing for seniors more efficiently.

The Victorian Government has a unique opportunity to lead the nation in forward-thinking housing policy. By including Retirement Living in the DFP, it can provide a critical boost to an often-overlooked segment of the housing market—one that delivers affordability, accessibility, and lasting benefits for the entire community.

It would also bring Victoria into line with NSW which provides state assessment processes for seniors housing developments of scale.

Helping You Navigate Policy and Approvals

At Ethos Urban, we specialise in navigating complex planning and policy landscapes to support better housing outcomes. If you’d like to discuss the most efficient approvals processes for your Retirement Living development, get in touch with our team.