• Wed
  • Jul 23, 2014
  • Updated: 9:44pm
International Property

Homes for elderly costly to develop

PUBLISHED : Monday, 30 July, 2012, 12:00am
UPDATED : Monday, 30 July, 2012, 12:00am

High land and construction costs and a lack of infrastructure such as hospitals and community facilities are making it more difficult to develop affordable retirement housing on the mainland, property analysts say.

'Retirement homes have specialist requirements,' said Thomas Lam, head of research for Greater China at Knight Frank. These include a low-noise location, communal facilities and access to good transport.

'All these features push up costs, making retirement homes unaffordable for the elderly in low- to middle-income families,' he said.

There was no land specifically allocated for retirement housing on the mainland at present, Lam said.

Foreign investors he spoke to said without such restrictions on land use, developers preferred to build private residential projects on sites earmarked for residential use, as these were usually more profitable.

With a third of mainlanders expected to be over 60 years old by 2050, the central government should promote retirement home programmes, given the benefits such homes could bring to society, Lam said. One method of doing so could be to introduce financial incentives to private developers and investors, such as tax benefits and construction subsidies.

The government should also consider the possibility of using abandoned, collectively owned land in suburban areas as a source of low-cost land for developing housing for the elderly, Lam said.

David Ji, the head of greater China research at property brokers DTZ, echoed these views.

In the absence of government support or incentives, the costs of developing a housing project for the elderly was significantly higher than that of an average housing project built to similar quality, Ji said.

'Rarely have we heard of a seniors' housing developer outbidding other developers at a government land auction,' he said.

Despite the challenges, some major developers, such as Poly Real Estate, Greentown China and China Vanke, have invested in building homes for the elderly.

 

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