The real estate market in Australia is a constant source of fascination for the media and a popular topic for discussion around the BBQ. But does it have any relevance at all to the retirement living industry, and in particular, your purchase of a retirement home?

The property market will impact upon your decision to move into a retirement community in a couple of ways:

Firstly, Pricing. The prices of residences in a retirement community typically reflect that of the surrounding residential area. So if a two-bedroom apartment in a standard residential apartment complex is worth $300,000, you would expect to pay a similar price for a two-bedroom apartment in a retirement community. Similarly, if the prices are going up or down in the surrounding residential area, then you could expect this price movement to be reflected in unit prices in the retirement community.

Related to this is the fact that, for most people at least, you have to sell your house in order to fund the purchase of your new retirement home. If there is strong demand in your area for houses then you should get a good sale price for your home, and a good sale price outcome enhances your purchasing power when looking at retirement units.

If demand for property in your area is flat, then you may struggle to sell your home and it is unlikely that you will achieve your price expectations. The silver lining to this cloud however, is that if you are buying a retirement unit in the same area in which you live, you should be able to buy into the retirement community at a cheaper price.

If you sell into a flat market, you will buy into a flat market.

If you sell into a hot market, you will buy into a hot market.

Now obviously, property markets around the country differ. For example, the market in the Northern Beaches of Sydney is going to be different to that of the Western Suburbs of Melbourne. Some smart people try to “arbitrage” out of a hot market into a soft market. At the moment the property market in Canberra is hot, whereas the market in Southeast Queensland is very flat. Sharp buyers are selling their properties in Canberra and relocating to Brisbane, the Gold Coast or the Sunshine Coast, and getting considerable value for their money – this strategy could get you up to 20% better value than if you were simply buying and selling within the same property market, because retirement home vendors are always ready to “do a deal” to get some inventory off their books in such a flat market.

So if you are based in a strong property market in one of the southern states and are considering a move north, now is great time to make the move!