Old age homes are becoming increasingly popular thanks to the growing population of senior citizens looking for accommodations that offer more than the usual. Seniors in their 80s and older are expected to double come 2037 thus making assisted living facilities in demand.
Why Capitalise on the Baby Boomers?
Demographics is fuelling demand. 65+ older complexes will have an uptrend because baby boomers born from 1946 to 1964 are approaching retirement age. About 10,000 baby boomers turn 65 years old every day and a large percentage of these individuals are considering moving into a suitable housing ideal for their situation. Most of these choose to old age homes that offer independent living options.
The senior housing market continues to perform well, attracting a good number of global investment. This property investment has proven to be an effective defence against an economic downturn. In the data provided by the National Council of Real Estate Investment Fiduciaries (NCREIF), total ROI for senior housing is 14.98% and 11.63% for the past five and one-year periods. This means returns for senior housing is considerably higher than other real estate property types.
Where to Invest in Old Age Homes?
According to the Ministry of Civil Affairs, nursing homes in China more than tripled in number in the last five years. Figures show that the country had 144,600 old age homes compared to five years ago, a staggering 226% increase. This is expected to increase even more as the Chinese population continues to rise. At the end of 2016, as much as 230 million Chinese are aged 60 and above. This means investing in Chinese retirement homes will bring in higher yields, particularly for the long term as more and more Chinese people welcome the idea of living in old age homes.
In a survey, a number of parents aged between 40s and 50s are open to living in a retirement community. This is because they do not want to burden their child and also to increase friendship as they grow older.
China’s housing market remains robust, with home prices increasing by as much as 325% in the last two years alone.
The Indian retirement homes industry is slowly catching up. This popular Western concept is now finding new acceptance in Asia where there is high regard for family relationships. There is a notable shift in the preference of old people to live in apartments offering advanced medical facilities and high level of security. Pune, Bangalore, Mysore, Chennai, Coimbatore, Dehradun, Goa, and Chandigarh are emerging as attractive senior citizen destinations in India.
Investors should look at this young market to maximise gains and yields. Buying into old age homes in these areas are still cheap and would bring in more bucks in the years to come. Areas near the Bangalore International Airport have apartment rates of Rs 2,500 per square foot, an attractive price.
Panama topped the International Living Annual Global Retirement Index as the best place to retire. Investing in Panama is a great idea as the country has yields ranging from 5.7% to 7.3%, specifically higher for beachfront properties.