- Asia’s senior population (aged 65 and above) will nearly triple by 2050 to 945 million
- Singapore expected to be among the top five Asian economies with the highest percentages of seniors by 2050
- Surge in demand expected for mid-range senior housing solutions owing to demographic shift and rising affluence
Singapore, 14 May 2018 – Asia is facing an ageing crisis with rising life expectancies and record low birth rates in some countries, as a result there is an increasing need for senior housing to cater to Asia’s ageing population. In a new report released today, Colliers International (NASDAQ: CIGI; TSX: CIGI), a global leader in real estate services, identifies key trends in Asia’s demographic shift as well as innovative senior housing models around the globe which may be applicable to this region.
Asia’s Ageing Crisis
Asia’s senior population (aged 65 and above) will nearly triple by 2050 to 945 million. The number of people aged 75 and above will jump from 137 million to 437 million over the same period. Japan’s seniors will comprise a staggering 36.4% of the population by 2050; South Korea (35.3%), Hong Kong (33.9%), Singapore (33.6%) and Thailand (29%) representing the top five Asian economies with the highest percentages of seniors by 2050.
Mr. Govinda Singh, Executive Director, Valuation and Advisory Services at Colliers International, said, “Singapore’s greying population presents many opportunities for both policymakers and private developers to further invest in senior housing solutions. Demand for such accommodation will be also spurred by the rising awareness of healthcare and wellness benefits, and retirees having the financial capacity to take advantage of senior living services and facilities.”
The Singapore government said in January this year, that it is studying models for assisted living facilities, where senior residents can retain their independence by living at home but have access to nursing and personal care services. Assisted living offers more autonomy to the residents compared with the institutional model of nursing home care.
On May 12, 2018, Singapore Prime Minister Lee Hsien Loong officially opened the country’s first retirement community Kampung Admiralty in Woodlands – an integrated residential development with a range of healthcare, elder and childcare facilities, together with commercial space to serve residents of the area. The concept was conceived by the Housing and Development Board more than four years ago.
Senior housing in Asia
Four major categories of senior housing have emerged in Asia thus far:
- Housing developments for active seniors
- In-home care
- Assisted living facilities
- Skilled nursing care facilities
Innovative models from the West
An integrated housing model has emerged in the US which may be applicable in the Asian context. Continuing Care Retirement Community (CCRC) provides greater convenience for seniors as this model provides the full continuum of care, from independent living to assisted living, in a single sprawling community offering recreational, social, medical and nursing facilities. CCRCs in the US relies on an entrance fee plus a monthly service fee model.
The Deferred Management Fee (DMF) retirement village model is common in the UK and most prevalent in Australia, where the senior purchases either a freehold or leasehold interest in a unit for under market rates and pays a relatively low monthly fee for the services provided.
Mr. David Faulkner, Asia Managing Director of Valuation and Advisory Services at Colliers International, said: “Perhaps the most innovative and attractive financing models for seniors, their families and developer are life care plans that require a higher entrance fee but guarantee a significant portion, up to 90% in some cases, to be refunded to the senior or their heirs.”
Outlook for Asia
The tradition of mature children taking care of elderly parents is still the norm; hiring household help is also relatively affordable in many Asian markets, leading to less demand in assisted living facilities. However, these norms may be changing due to migration trends where children move elsewhere leaving their parents behind in their home country. Therefore, the demand for continuing care senior housing is likely to grow.
Mr. Faulkner added: “Governments and developers must focus on broadening the range of senior housing options for the middle class – a fast-expanding segment throughout much of Asia. In markets where property prices are soaring, this segment may not have access to adequate subsidies or public facilities for elderly care, yet could be priced out of more expensive private offerings. As Asia ages and at the same time becomes more affluent, there will be a surge in demand for mid-range senior housing solutions, and policymakers and private developers should tailor plans accordingly.”
To download a copy of the report, visit here.