Not so long ago, retirees looking to sell up the family home and move into a retirement living facility, may have faced a stark contrast in their options. On the one hand, a traditional retirement village complex consisting of well-appointed, bricks and mortar buildings. On the other, a caravan park.
In terms of amenity, it’s hard to achieve the same level of comfort and space in a caravan – a dwelling that needs to be hitched to a car to be transported – as you can in a permanent, purpose built home.
And that was part of the problem. The rules which govern caravan parks – also known as manufactured housing estates – require that the residents own the dwellings but rent the land on which they sit. The dwellings are typically known as unregistered motor vehicles, and they must be relocatable within 48 hours or under a week, depending on which state you’re in.
However, changes in building technology and prefabrication mean that high quality housing can now be assembled off-site and simply forklifted into place and just as easily removed to another spot, satisfying the legislative requirements for mobility.
Now a site populated by mobile homes is unrecognisable from a traditional retirement village, many of which have also been assembled from prefabricated units.
The negative associations of caravan parks may have caused many investors to shy away from purchasing a dwelling and leasing a site. But the modern version of mobile home living offers a very high standard of amenity.
Manufactured housing estates, or MHEs, appeal to people who wish to move into retirement accommodation but do not want to be subject to the complex rules and hefty fees associated with retirement villages. In particular, the deferred management fee can require the resident to pay back up to 30% of the resale value of their apartment once they leave the village.
We are seeing very fast growth in MHEs because people understand the simplicity of the financial arrangement and because a range of these estates are seeking to attract younger people, in their mid to late 50s, as part of the overall offer.
The prefabrication techniques that have made this revolution in mobile homes possible, has also resulted in much cheaper housing and with modular design flexibility, benefits which are being utilised across the board by home-buyers and not just retirees in MHEs.
Because it is difficult to secure finance on MHEs, most purchases are on a cash only basis, so this arrangement appeals to those who have paid off, or almost paid off, their mortgage, or can cash in their super, and don’t need to take out a loan. For between $300 and $350 thousand, you can own outright a fully operational, 120 square meter, two bed and two bath room home.
As well as being high quality homes, the latest MHEs have very long leases attached. In many cases you can secure up to 50 year leasehold on the land to provide long-term certainty for your investment. Many people of retirement age may qualify for commonwealth assistance for the land rental component, freeing them from the land lease cost.
In some MHEs, you can even rent the dwelling; you don’t need to provide your own.
It’s a legitimate form of housing but with the added benefit of mobility. So if in 10 years, your children move to another area, you can join them by simply lifting up your home and taking it with you!
About the author:
Brian Haratsis is MacroPlan’s Founder and Executive Chairman. Brian is an economist and future strategist with over 30 years experience as an advisor to governments and major corporate clients throughout Australia and New Zealand. For more information or to discuss your property research requirements, please contact Amy Williams on 02 9221 5211 or firstname.lastname@example.org.