Trend watch: Be well
Wellness is becoming the newest trend in real estate and Australia is a leading light in the global wellness property market.
Real estate and communities that put peoples’ health at the centre of design and development are the next frontier in residential real estate.
To combat modern problems of sedentary lives, unhealthy diets, stress, social isolation, loneliness, pollution and nature-deprivation, real estate developers are creating and expanding ‘wellness homes and communities’ which include structures that aim to support the holistic health of residents.
The push to create residential communities that foster healthy lifestyles is seeing ‘wellness’ being integrated into the DNA of the real estate industry. And given that wellness in real estate is a $134 billion industry, growing annually by 6.4 per cent, it’s little wonder Australian investors and agents are tapping into the trend. In fact, with a value of $9.5 billion, Australia is currently the third-largest wellness real estate market globally. Many believe investment in this sector will continue to grow as people’s health and behaviour is positively impacted by their homes and community spaces.
The Global Wellness Institute’s Build Well to Live Well report found that the potential for the wellness property sector is huge, with consumer demand for healthy homes outstripping supply. In the US there are 1.3 million potential buyers each year but there is only a pipeline of 355 projects.
Australia boasts the second highest number of projects in the pipeline – 189 residential properties that incorporate intentional wellness elements – with a trend towards centralised, larger-scale developments with a greater focus on sustainability.
Australia has been a trailblazer for the development of wellness lifestyle real estate since its first projects started in the early 2000s. Growth in the market, underpinned by support from government at all levels, has been spurred by population growth, ample land for development and concerns about urban sprawl. In the last five years, developments have ramped up dramatically with many medium-to-large-scale suburban mixed-use and master-planned communities being developed in every major metropolitan market across the country.
Consumers are demanding healthier built environments and are willing to pay more for them. According to the GWI, residential developments that have been partially or fully planned with wellness-enhancing features are achieving premium prices – averaging 10 to 25 per cent more.
GWI found homebuyers and renters are willing to pay extra for built environment features (design approaches, infrastructure, and amenities) that improve their health and wellbeing including:
- Proximity and easy access to high-quality natural and recreational amenities
- New Urbanist features such as mixed-use, higher-density, transit-oriented, and traditional neighbourhood design
- Neighbourhood walkability
- Sustainability features (homes with green certification labels and energy-efficient features)
- Healthy home features
There are currently more than 740 projects built, partially built or in development across 34 countries. The GWI estimates there are over 1.5 million units/homes either already built or planned to be built over the next couple of decades which will encompass 560,000 acres of land and house more than 4.1 million people.
Upshots for investors include: “faster-than-expected sales and lease-up rates (and even waiting lists); lower-than-projected turnover; and higher sales prices and rental rates”. So embracing the wellness movement might be just the ticket for landlords looking to augment and possibly future-proof their investment property portfolio or for agents trying to carve out a niche market.