Forecasting demand for retirement living
ClientProperty developer and retirement living provider
Major investment decision into niche market with little modelling available.
Developed a detailed picture of supply and demand for every suburb based on demographic evidence, client data and competitor information. The client could rank areas based on current and future levels of demand, relative to current supply, and select the best opportunities for investment.
Evidence-based, rational, confident investment decisions.
A prominent retirement living provider was looking to invest some hundreds of millions of dollars into retirement villages across Australia. They needed a robust assessment of potential demand so that they could invest with confidence.
Working collaboratively with the client, .id developed reliable and transparent predictions of future retirement living demand, as well as robust models of client catchment and take-up. The visualisation tools built into .id Placemaker also enabled the client to communicate clearly the basis of their investment decisions to relevant stakeholders.
The client was looking to make a major investment (some hundreds of millions of dollars) into retirement villages across Australia. They needed a robust assessment of potential demand, as well as an evidence-base for planning their supply response.
At the time, little modelling had been done of aged care demand, especially spatially, as it is effectively a niche, age-and-background specific segment of the housing market. Yet the business was planning to make serious investment decisions.
The .id solution
Using the location analysis application, .idPlacemaker, coupled with .id’s population forecasts, demographic analysis and data from the client, .id was able to construct a detailed picture of both current and future demand, keying off not just population by age, but detailed target market criteria, as well as demographic indicators for propensity to choose a retirement village, current penetration rates, ability to pay and site desirability.
.id was able to model catchment areas for retirement living villages, enabling the client to test existing rules of thumb – that people wouldn’t travel more than 15km to a retirement village, or that people were prepared to relocate further when moving to coastal villages, for example.
.id also helped the client identify areas where the current take-up of retirement living was low, potentially pointing to a lack of supply in the area. This also helped rule out areas with high demand but which were already well serviced by existing supply.
Through .idPlacemaker, the client was able to layer existing supply onto detailed maps of potential target markets, enabling them to make evidence-based investment – now and in the future.
The client said,
“They are passionate people focused on one specialist area – demographics. The result was a highly focused piece of work which provided us with the evidence-base to make rational, confident and consistent investment decisions.”