Interview with Kat Parr-Mackintosh of nestoria.com.au

Seniors Housing Online joined us as a partner soon after Nestoria launched but never got a formal introduction on the blog. While rectifying that it seemed like a good opportunity to talk to co-founder, Amanda Graham about the specifics of working in real estate in their target market, and the changes Australia's ageing population might have on the industry at large.  I asked Amanda to begin by giving us an understanding of her own background and the background of the company. Here's what she had to say to us.

I trained as a lawyer initially and at first I worked with juvenile offenders in the children’s court then moved to work in government on law reform and developing social policy, and completed a Master of Business Administration. This took me to working in politics, for a state Premier, several Government Ministers and Sydney’s Lord Mayor as a policy adviser and Chief of Staff. This work included responsibility for Ageing services, so I was well aware of the challenges for government in caring for an ageing population, especially around accommodation needs.

Can you also talk us though where the idea for Seniors Housing Online came from and how the business has developed?

The practical side really hit home when I had to search for accommodation for my own father, and I became extremely frustrated at the absence of a website to help with this process. It seemed such an obvious area to apply the benefits of an internet search! to Like many people assisting older family members, my (co-founder) sister in law Catherine and myself were busy working full time, had children of our own, and lived over an hours’ drive away from dad – making it all very difficult. We looked at the real estate websites and asked ourselves “why isn’t retirement property on there, or why hasn’t someone set up one of these for aged care?”

It turned out that the aged care and retirement property industry was incredibly fragmented, and as it was not marketed through real estate agents, it was not being captured by the real estate websites. In addition, at that time the developers/ managers of these properties relied mainly on local newspaper advertisements and most did not have any online presence at all. But as consumers we found it almost impossible to locate suitable retirement property, especially when we didn’t live in the search area – I was reduced to using the yellow pages, ringing dozens of places during business hours only to be told they were the wrong type of place, they had no vacancies, they were the wrong price range or even (incredible but true!) “could I please ring back on a Thursday morning between 9.30 and 12 noon when the relevant staff member would be there..” Needless to say there were no photographs available either and I had to waste numerous weekends setting up appointments and driving for hours to inspect totally unsuitable properties before I could even get together a shortlist to show dad. It’s a sensitive time for an elderly parent and there was no way I was going to upset him by taking him to inspect unsuitable places, sight unseen.

Catherine and I knew that many other people must be sharing our experience, and it really didn’t need to be this difficult. The funny thing was that initially the retirement property and aged care operators all shook their heads and said that the sector was not ready for internet marketing, and anyway old people didn’t use computers so there was no point! They didn’t seem to think about the people like us who were typically helping their elderly parents, which is who we had in mind when we first set up the website. And the consumers very quickly proved us right – they loved our site immediately so the biggest challenge early on was persuading the property managers to list with us so we had the content.

Interestingly, when the site was first established the majority of visitors were family and friends of older people needing retirement accommodation – but now older people searching online for themselves massively outnumber them and we’ve adapted the business accordingly. Older people have definitely adopted the internet very quickly, with many in their 70’s and 80’s relying on email and joining Facebook, often so they can view their grandchildrens' photos etc. But there’s still a lingering stereotype about older people not using the internet, which really underestimates the huge online potential in targeting this demographic.

As you've mentioned above, Seniors Housing is a property portal with a specific market. Can you talk a bit about how you've developed your site so that it best suits your demographic?

As more older people use the website for themselves, the focus of the business has shifted from higher needs “aged care” accommodation for those in their 60’s and beyond to younger retirees and downsizers in their 50’s looking for larger, more modern “resort style” independent living properties offering a holiday lifestyle near beaches and golf courses. Aged care is now a much smaller part of our market, and the biggest market is the “baby boomer” generation, who have very different expectations and lifestyles to that of their parents. As they hit retirement age, they are now transforming the retirement property market as well as the whole concept of retirement and this is reflected in the range of properties featured on the site and the search functionality.

We’ve recently redesigned the site and people can now search for waterfront retirement properties, golf retirement properties, beach-side retirement properties, pet-friendly retirement properties, retirement villages and many more lifestyle preferences like this. The regional search options recognise that people are often prepared to move to a new area to attain the sort of holiday lifestyle they want in retirement, and to release extra cash from the sale of their family home. They can also filter search results by the level of care available (if needed), price and number of bedrooms.

What sort of design and functionality choices have you made that you think are specific to your market?

Our market is a niche property market, so we’ve adapted the best real estate website functionality and enabled people to search various types of retirement property categories, including independent living, low care and high level aged care, as well as buy(or entry cost) and rent (or weekly cost). There is a wider range of legal occupancy arrangements commonly used in the Australian retirement property sector than in the general residential real estate market, and aged care services are often provided under a complex formula based on means testing, so we’ve had to incorporate all this into the search functionality in a way which makes sense to consumers and keeps it simple. And we’ve enabled search filtering for a wide range of lifestyle choices including golf retirement properties etc. as described earlier as well as specific property features like lift access or no steps. As people in this market are often searching for retirement property outside their local area, the photographs, plans and google maps location for each property are especially important features too.

The site is really unique in the capacity it offers for consumers to tailor their own search to meet their specific needs and personal preferences.

Do you think people still feel there's a stigma about retirement living? Do you think the retirement lifestyle has changed over the past few decades? And do you think that people are fully aware of the changing nature of this sort of a lifestyle?

There’s a big difference between retirement living and aged care services, and I think people still confuse the two. One is about lifestyle and the other is about healthcare services. Retirement lifestyles in Australia have changed enormously in recent years, reflecting the demands and expectations of the baby boomer generation. People are now looking for luxury, a holiday lifestyle and quality of life when they finish work, or as they gradually exit from the workforce - the whole concept of “retirement” is more transitional and not so clear cut as it once was.

Now there’s an acceptance that it’s just a different stage of life, that people live much longer with better health so there’s plenty of time to enjoy life more without the responsibilities of working to pay off the mortgage and support young children. Just as 40 is the new 30, 50 is the new 40 - Australians aged over 50 now commonly work part time; undertake courses to learn or study; travel more regularly both nationally and internationally; take up sports and focus on keeping fit and healthy. This generation has more accumulated wealth and disposable income than younger consumers, they are accustomed to the finer things in life and have no intention of downsizing their quality of life in their later years. They certainly don’t consider themselves to be “old”!

In Australia, there is a higher level of home ownership than in many other comparable developed countries and in the past twenty years the residential property market has boomed, delivering high (tax free) capital gains. So selling the family home is a common way to help fund that lifestyle. It’s become very popular to downsize to a villa or apartment in early retirement and release cash as well as reduce the burden of home and garden maintenance. Many younger retirees look for a “lock up and go” property so they can travel regularly, or want space to park their boat or caravan. And there are many new retirement property developments which cater specifically to this “over 50’s” market and their lifestyle focus. As people get older, if their health declines they may have the option of buying in-home support services or moving to accommodation offering a higher level of aged care support.

Finding a home is always stressful, but it must be an even more stressful decision for older house hunters. Do you think there are adequate accommodation provisions for Australia's ageing population or do you think the situation will become more competitive?

Yes it can be very stressful particularly for the older generation of retirees, who tend to want to stay in their long term family home for as long as possible. For many it means they struggle with maintaining the home for years and then eventually they are forced to move after a fall, declining health or the death of a partner. This scenario is very traumatic for all concerned and it is usually the adult children who step in and assist with these decisions. By this stage high level aged care is more likely to be needed and it may be difficult to find a place.

In recent years, increasing demand for aged care services due to an ageing population has seen governments fund more in-home aged care, to enable people to “age in place” and receive more support services in their own home as they become more frail. This is a more cost effective use of limited public resources and frees up facilities with high level aged care places for those most in need. It also means younger retirees downsizing to lifestyle properties can access more support if needed without having to move house later on.

Retirement villages have been popular in Australia for many years – these are purpose built communities with common facilities, comprising mainly of independent living villas and apartments, but often offering higher levels of care on the same site. However many of these are older building stock which do not meet the expectations of younger retirees, prompting the recent development of many new villages with larger more luxurious villas and resort style facilities such as swimming pools, bowling greens, gyms and restaurants.

There is a mix of not for profit and commercial developments and in the past few years it’s moved from being an extremely fragmented industry following considerable market consolidation, as larger groups buy up independently owned and managed villages. With consolidation, marketing activity has become more professional and centralised as the larger groups recognise the importance of advertising online and gearing up to cater for the imminent retirement of the baby boomer generation.

While there’s adequate housing stock available to cater for the younger retirees looking for lifestyle property, the real challenge lies in funding sufficient high level aged care as demand increases for limited places with an ageing demographic.

Do you think the Australian Government should be more pro-active in this sector? Or do you think that this is the changing nature of the Australian housing market, and it will become less common for people to leave whole properties to their kids, having instead used the equity in them to help fund their retirement?

There’s a major policy debate going on in Australia at present about what provision is made by government to fund aged care services for an ageing population, and how much should be paid for by individuals as a private cost, and how this can be managed equitably. We’ve currently got a system of accommodation bonds in place, which is often based upon the value of the family home, and there are also complex asset tests around the aged pension and government benefit eligibility. There’s broad acknowledgment that demand for aged care services has outstripped the capacity of the existing arrangements to fund the services required but no clear consensus on the best way forward. With a minority government in power only with the support of independent and greens MPs after recent elections, there’s unlikely to be the political will to make the sort of hard decisions needed but which are likely to alienate a significant proportion of the electorate.

Australia has had compulsory superannuation in place for some years too, although at present these retirement savings are insufficient to privately fund the level of aged care services needed. Meanwhile more retirees are selling the family home to release capital to fund their retirement, or else using reverse mortgages or shared home equity products to subsidise their retirement lifestyle. So yes, it’s becoming much less common for people to leave whole properties to their kids, and when the baby boomer generation has spent their home equity they’ll still be dependent on government services to support their final years, so the national government needs to take a responsible long term view about how to manage these costs and build consensus around this issue.

Not all of your target market have a reputation for being web or techno. savvy, can you think of any technology - be it a website, an app. or a product - that has, or could make this process a lot easier for them?

Most people start to need reading glasses in their 40’s, so two things which immediately spring to mind are larger fonts to make things easy to read as eyesight declines, and voice technology to avoid reliance on visuals and keyboards. Things like small keypads on mobile phones are a particular problem for an older demographic. Also for frailer older people, emergency call pendants and similar technology has been really important in enabling longer term independence, so updating and integrating these benefits into other products and making them cheaper and more accessible would be fantastic. Even some of the electronic diary applications would be great to manage medications and appointments and probably could be tailored for this market.

And if you could invent some kind of site or technology or app. etc. for property, and there were no limitations on its powers, what would you think would be the ultimate property tool/ product?

Real estate websites combined with google earth have revolutionised the real estate industry and really empowered consumers. Anything which enables the consumer to more accurately research and assess a property online is great – eg. if google maps could show a 360 degree view of the property including the surrounding landscape from any angle and bring up the most recent sales prices of neighbouring properties, and of course the ultimate online democracy is to cut out the middle man (or woman) by directly connecting buyers and sellers with full access to relevant information. Also when buying and selling property the whole legal process of searches and transferring title is very cumbersome and expensive so there must be a technologically better way to do all this online!

Thanks very much for sharing your thoughts with us Amanda. There are certainly some appealing properties on SHO. And if there was a way to make the transference of property titles cheaper and easier then you'd be helping out the whole market – so that's a fantastic suggestion... Any one out there have any suggestions on how it could be achieved?

Kat Parr-Mackintosh from Nestoria.com.au