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Average resident comparison figure 

Retirement village operators must include an ‘average resident comparison figure’ in disclosure statements provided to prospective residents on or after 1 March 2018.

What is the average resident comparison figure? 

The average resident comparison figure adds up the total of the main fees a resident is likely to be charged when living in a particular village and expresses those fees and charges as a single monthly figure.

It is designed to help residents understand and compare the financial cost of living in different retirement villages.

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The average resident comparison figure is an estimate only 

The average resident comparison figure is an indicative figure only and does not represent the actual outgoing payments made by a resident. This is because assumptions are applied when calculating the figure such as the rate at which the price of the property will grow over time. If the actual rate differs from the assumed rate, the calculation will be different.

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How will the average resident comparison figure assist residents? 

The average resident comparison figure is intended to increase awareness about the financial implications of different village contracts. By reducing the main financial costs to one figure, a prospective resident can use the average resident comparison figure to compare the costs of different village contracts (and to get an indication of the different costs associated with different villages). However, residents should not solely rely on the average comparison figure and must ensure they understand the terms and conditions of their contract.

It facilitates greater transparency for residents and better equips them to evaluate the costs of entering a retirement village.

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Non-financial factors are not included in the average resident comparison figure 

Prospective residents should also be aware of non-financial factors when considering a village, and should consider how important these factors are to them in making a decision. For example, a resident may need special medical assistance, they may prefer a village's landscaping or culture, or have a preference for certain geographic locations.

The average resident comparison figure does not attempt to incorporate or value these non-financial factors and focuses solely on the most significant financial matters specified in the village contract.

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How do village operators calculate the average resident comparison figure? 

The average resident comparison figure is the ‘average monthly amount’ that an average resident would pay under a retirement village contract. It is the sum of the following fees and charges over an assumed residency period of seven years (84 months):

  • the total amount of recurrent charges payable under the village contract
  • the departure fee payable by the resident if the premises are permanently vacated at the end of that period; and
  • capital gains, if any, payable to the operator by the resident in respect of the unit.

In calculating the average resident comparison figure, the operator must apply assumptions about the increase in value of the unit based on Australian Bureau of Statistics historical housing data.

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