Since 1 March 2018, retirement village operators in NSW have been required to include the Average Resident Comparison Figure (ARCF) in disclosure statements issued to prospective residents.

The ARCF is an indicative figure intended to assist prospective residents in understanding and comparing the financial costs of living in different villages.

The ARCF is calculated as the monthly average of the sum of the following amounts over a period of seven years:

• The total recurrent charges payable under the village contract;
• The departure fee payable by the resident if the premises are vacated at the end of that period; and
• The operator's share of the estimated capital gains (if applicable) payable by the resident at the end of the period.

For the purposes of calculating the capital gains, the ARCF uses the resident's entry payment varied in accordance with the 'capital growth rate'. This rate is based on publicly available data published by the Australian Bureau of Statistics (ABS), being the average annual change in the March quarterly variation for the preceding 10 years of the relevant ABS index.

Each year, the method of calculation changes in line with the updated ABS index relevant to the resident's premises.

The latest ABS data for the March 2024 quarter has recently been published. As a result, calculations of the ARCF need to be updated to include the latest average annual growth percentage in property value, as applicable to each village. This index depends on the location of the village (Sydney or the rest of NSW) and the types of dwelling (established house or attached dwelling).

The updated percentages are as follows:

1. Median Price of Established House Transfers (unstratified):
   • Sydney index – 7.51%
   • Rest of NSW index – 7.53%
2. Median Price of Attached Dwelling Transfers (unstratified):
   • Sydney index – 2.84%
   • Rest of NSW index – 6.52%

If you are already using our tools to calculate the ARCF for your village, please ensure you update the spreadsheet formula to include the new applicable percentage.

If you would like assistance to understand or update your disclosure statements, or would like a customised tool to make calculating the ARCF easier for your sales team, please contact our national Health, Aged Care and Retirement Village team.

Authors

Nikolas Miljkovic | Partner | +61 2 8248 3406 | NMiljkovic@tglaw.com.au

Arthur Koumoukelis | Partner | +61 2 8248 3437 | AKoumoukelis@tglaw.com.au

Lucinda Smith | Partner | +61 2 9020 5748 | lsmith@tglaw.com.au

Leanne Truong | Associate | +61 2 8248 3454 | ltruong@tglegaltech.com.au

Natasya Currie | Lawyer

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