Retirement Communities Market Size, Trends & Forecast [2031]

Report Description

Retirement Communities Market Outlook

The Global Retirement Communities Market was estimated at USD 548.3 Bn in 2022 and is anticipated to reach USD ~852.3 Bn by 2031, expanding at a CAGR of 5.2% during the forecast period.

Retirement communities are a type of housing arrangement, built specifically for older persons, often those aged 55 and up. There are many different types of housing, from single-family detached homes to apartment-style living. Such housing arrangements are considered comfortable for older people, frequently being compact, simple to navigate, and requiring less maintenance & yard work.

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Benefits of Retirement Communities

Encourages a Low Maintenance Lifestyle: Retirement communities take care of all house maintenance needs such as work that is done around the house, including raking leaves and washing clothes. Senior housing also offers a secure environment where individuals can try new hobbies.

Ensures Safety & Security: Retirement communities have alert systems in each apartment house to ensure safety and peace of mind for the residents. Additionally, these communities offer options with 24/7 nursing care for residents with moderate to severe health conditions to guarantee that their requirements are constantly addressed.

Focuses On Nutrition: Retirement communities offer freshly prepared food by culinary chefs, catering to nutritional needs of aged people. Additionally, restaurant-style dining rooms motivate mealtimes with friends and family, making each gathering an enjoyable social event.

Macro-economic Factors

Global Population

The rising global population is expected to impact the market growth positively in the coming years. According to the data by UN, the global population has increased by more than three times since the middle of the 20th century.

In mid-November 2022, there were 8.0 billion people globally, up from 2.5 billion in 1950, 2 billion since 1998, and 1 billion since 2010. The global population is projected to rise by almost 2 billion people over the course of the coming 30 years, rising up to 9.7 billion in 2050.

The rapid rise in population has been primarily caused by an increase in the proportion of individuals reaching reproductive age, the gradual extension of human life expectancy, growing urbanization, and accelerating migration. Increasing population has been accompanied by significant changes in the fertility rate.

China and India are expected to be the majorly populated countries, each with more than one billion people and accounting for roughly 18 percent of the global population. India is anticipated to surpass China as the majorly populated nation around 2023 across the globe, while the population in China is anticipated to fall by 48 billion, or roughly 2.7%, between 2019 and 2050.

Healthcare Spending

The health expenditure across the globe affects the affordability and accessibility of retirement communities. A high health expenditure indicates high willingness and ability to pay for assisted living. A low health expenditure indicates low willingness and ability to pay for assisted living.

According to a data by the US government, its national healthcare expenditure grew by 2.7% to USD 4.3 trillion in 2021, or 914 per person, and accounted for 18.3% of gross domestic product (GDP). Additionally, Medicare spending grew by 8.4% to USD 900.8 billion in 2021, or 21 percent of total National Healthcare expenditure (NHE).

Retirement Communities Market Dynamics

Market Driver- Rising Global Geriatric Population

The rising global geriatric population is expected to drive the retirement community market in the coming years. The majority of individuals expect to live into their 60s and beyond. Every country across the globe is seeing an increase in the number of elderly persons and their demographic share.

Additional years provide the opportunity to pursue unique endeavours such as advanced education, a new career, or an interest. Older people also contribute much to their families and communities. The market for retirement communities’ benefits from the growing elderly population.

For instance, according to research released by the WHO, the number of individuals over 60 across the globe is expected to rise from 12% to 22% between 2015 and 2050. In 2020, there are expected to be more people over 60 than children under five. Additionally, the population is aging considerably more quickly than in the past.

Furthermore, according to data from the Office for National Statistics, the population of England and Wales has continued to age, with Census 2021 figures showing that there are more people in older age categories than before. According to the census in 2011, more than 11 billion persons, or 18.6% of the total population, were 65 or older, up from 16.4%.

Market Restraint- High Service Cost

The high service cost of retirement communities is expected to hinder market growth during the forecast period. The cost of living in a retirement community varies highly depending on geographic location, the type of housing, and the amenities offered. Retiring to a senior living community entail paying an upfront fee, monthly fees, or both.

Some retirement communities require new residents to pay an entrance fee to move in. They are typically used to help pay for the services and amenities the retirement community provides, which include medical care. Entrance fees are often associated with continuing care retirement communities, which provide a spectrum of care to residents as they age.

According to the senior living referral service the National Senior Living Cost Index by A Place for Mom, the median monthly cost of independent living was USD 2,522 in 2018. For instance, according to NIC data, many Continuing Care for Retirement Community (CCRCs) charge an entry fee that varies by age and circumstances.
On average, the initial payment is around USD 402,000; however, the fees range widely, from USD 40,000 to more than USD 2 billion. Therefore, the high service cost of the retirement community hampers the market growth in the coming years.

Market Opportunity- Increasing Trend for Nuclear Families

The increasing trend for nuclear families across the globe offers an opportunity for the retirement communities’ market. People are choosing to stay in nuclear families, as it provides independence and peace as well as reduce conflicts. A nuclear family brings less conflict, as there are only a few people in such families.

Nuclear families have fewer people contributing to the family income and these families plan children carefully, as mostly only two people have to share the duties and costs of raising children. According to data by Organization for Economic Co-operation and Development (OCED), the number of one-person households is expected to grow by 2030 in all the OECD countries such as Japan (26%), the US (35%), Australia (48%), England (60%), New Zealand (71%), and France (75%).

According to a report by U.S. Census Bureau, there were 37.9 billion one-person households, 29% of all the US households in 2022. In 1960, single-person household represented only 13% of all households.

Moreover, according to another report by Office for National Statistics of the UK, there has been a significant rise in the number of one-person households in the past three decades from 1990-2020 in the UK. In 1996, there were 6.6 billion one-person households, which increased to 7.7 billion by 2015. Statistics show that more than 30% of all the UK households are one-person households in 2022.

Scope of Retirement Communities Market Report 

The report on the Global Retirement Communities Market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Retirement Communities Market Segmental Outlook

Based on Community Type, the market is segmented into Continuing Care Retirement Communities, Independent Living, Assisted Living, and Others. The independent living segment is expected to hold a considerable share of the market during the forecast, owing to the continuous rise in the geriatric population across the globe.

According to the World Health Organization 2022, the proportion of the world's population over 60 years is expected to be nearly double from 12% to 22% between 2015 and 2050.

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On the basis of age-group, the market is fragmented into age 55 to 65, age 65 to 75, and age over 75. The age over 75 segment holds a key share of the market, owing to the rise in chronic diseases. An increase in chronic diseases is expected to lead to an increase in demand for assisted living or continuous care communities.

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On the basis of services, the market is fragmented into housing, healthcare, wellness programs, and others. The housing segment holds a key share of the market, owing to the growing demand for independent living among old age people across the globe and rising preference for social interaction among old-age retired individuals.

Regional Outlook

Based on regions, the market is fragmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America accounted for a significant share of the market in 2022, owing to the rising old age population in the region.

According to the data by the Administration for Communities Living by the Department of U.S. Health and Human Services, expected a climb to roughly 80.8 billion residents 65 and older by 2040, more than double the number in 2000. It also predicts a doubling of the count of those 85 and older expected to grow from 6.7 billion in 2020 to 14.4 billion by 2040.

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Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the Global Retirement Communities Market

• Historical, Current, and Projected Market Size in Terms of Value

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints, and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on Global Retirement Communities Market PerProduct Typeance