Asia’s fast greying population poses a real threat to the future of their economy; on the flipside, it could present a golden opportunity for developers to build housing for senior citizens.
An elderly Chinese man sat at the edge of his bed, his aging body was frail, well-worn by hard labour and ailment. He stared into nothingness with defeated eyes as he turned the piece of tattered paper in his hand over and over again—a letter that he received from his son about a year ago.
“We can’t afford your medical treatment anymore.”
He crumpled the letter, picked up the bottle of pesticide from a low coffee table in front of him and took a long swig. He then laid back on the mattress, and closed his eyes. A few houses away from him, an elderly woman waited quietly as her husband climbed on top of a chair with shaky legs and tied two ropes around the ceiling beams. He then helped her up the other chair, looped the roped around both of their necks and kicked the chairs from under them. Just down the road, an old woman was found dead in a well.
Such is the tragic fate of the elderly in rural China—an outcome of their one-child policy that turns the once fastest growing population in the world into one of the fastest aging nation. However, the world’s most populous nation isn’t the only country suffering this plight.
The Greying Continent
A shocking report released by the United Nations shows that from 1994 to 2015, the number of people aged 65 and above in Asia has surpassed 225 million. This accounts for more than two thirds of the global population in that age group and is expected to reach 857 million over the next 50 years; while the population of the working-age group will remain stagnant. China and Japan, for example, have a rapidly declining workforce and have started feeling the pressure of having to support a huge aging population. So, why does the process of population aging occur much more rapidly in Asia than it did in Western countries—and at a much earlier stage of the economic development?
Population imbalance is a problem unique to developed nations, hence in Western countries as well as Japan, declining and aging population is at an advanced stage. But their matured economy allowed them the luxury of time to properly prepare to support an aging society; unlike the other developed economies in Asia which are still at their infancy stage and are poorly equipped to handle these challenges. As women become better educated and as cost of living rises, couples naturally tend to bear fewer children. Now countries like China and Singapore, which had intentionally skewed their population in order to climb into the ranks of developed countries are paying a deadly price.
Equally significant, developing nations’ culture is such that children are expected to care for their elderly parents as opposed to the more developed regions where the elderly prefer to live independently. A poll ran by the South Korean government discovered that the percentage of children who think it’s their duty to look after their parents has shrunk from 90% to 37% over the last 15 years. These demographic changes raise important concerns about the possible weakening of filial piety and traditional arrangements that guarantee old-age security. As a result, there is a looming worry about their future living arrangements; such as whether or not they’ll be able to live with their families, says Kiyoshi Sayama, Director of MBM Health, a company that specialises on elderly care services: “Imagine if your children refuse to take you in, where can you find a place that allows you to live in a comfortable environment and provide you with day-to-day assistance?”
Given a choice, most people in their golden years would rather live in a place where they have an emotional connection —a place where they feel a sense of belonging, shares Susan Suah, Deputy President of National Council of Senior Citizens Organisations Malaysia: “As you age, you seek convenience, security and comfort because these elements make you feel safe. It’s the same no matter which continent you come from.”
The Right Kind of Intervention
As the population continues to age, there is an urgent need to adapt the country’s policies and the provision of services to meet the demands of a nation with an increasing proportion of older people. There is a gaping hole between supply and demand in aged care living in Asian countries but there is very little initiative taken by the governing authorities and developers to fill it. “Currently, all of the economic activities and developments are targeted for the younger group but never for the older generation. In the past, there were talks about importing ideas from the West and building retirement villages here, but how many of these projects have taken off?” asked Suah, referring to the Malaysian context.
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Providing for the elderly isn’t as simple as painting a glossy picture of a luxurious, resort-like living for the retirees. Suah suggests we should put effort in studying the needs of the elderly from grassroots level. Many of these projects are deliberately built in less populated areas to provide potential customers with a sense of exclusivity and resort-like living but this is not what they need. “In Malaysia, all the retirement villages were planned in remote locations such as Bukit Tinggi and Sepang where there are very few activities and facilities. What these developers don’t understand is that these elderly don’t need luxury; they need to be connected with people. Loneliness is a real fear for them.”
In Korea, the elderly are dying alone in their apartments as a result of an economy that had developed much too rapidly— and to add to that, government support is weak, economic cost is increasing and the family institution is crumbling. Much like China, South Korea’s new economy isn’t quite ready to cater to a fast greying nation—especially with an inadequate pension and welfare system. South Korea’s elderly suicide rate has more than trebled since 2000, a drastic climb despite the government’s efforts to tackle the problem through the funding of various counselling and awareness programmes.
Even Japan which is currently in the lead when it comes to the supply of homes for the aged in Asia struggles to meet the demand. Presently, there are approximately 420,000 elderly in Japan on the waiting list of the Government Aged care home, says MBM Health’s Sayama. “The reason is that the room rates of government-subsidized aged homes are much lower than privatized aged homes. Most simply can’t afford going to a private institution.”
Sayama adds that if the Japanese government were to completely revise their taxation system in order to support the aging population, it could result in some serious political squabbles. Japan started planning and preparing for this problem in 1970 and it took them 30 years to finally come up with a social welfare scheme that’s effective for the country. It requires years of planning before an efficient social security system can be implemented without stirring a political minefield. “Asian countries especially in the Southeast should start planning now, otherwise it will create a serious social imbalance and threaten the economy in the future,” advises Sayama.
Filling the Property Gap
Despite the desperate need, Asia is far behind their Western counterparts in the provision of home care and retirement villages. Sayama agrees with the notion that the governments of Asian countries should have a direct involvement in implementing policies and plans that cater to the older generation: “It is not the sole responsibility of the developers to fill this supply gap as it is a heavy task. Even for a wealthy country that can afford subsidised, high-quality medical services and care giving like Japan, the current allocation for the aged is not sufficient. In 2014 alone, the government allocated RM2,000 trillion for pension fund, RM1,300 trillion for medical care and RM800 trillion for Nursing Care.”
As a retiree who actively champions the needs of the elderly, Suah feels that it is time to create better awareness of a more aged-friendly environment. “Asia has been rapidly progressing and developing world class infrastructure, but we still have a long way to go— we are not even close to being aged-friendly and that is an area to improve on. I’ve sat in so many meetings 10 years ago, to discuss on the matter of welfare and healthcare for the aged in Malaysia but it took so long to implement. Until today, nothing has materialised—they need to realize that time is running out.”
“A lot of places are overbuilt and the residential and commercial property market is already saturated, yet no one has made the move to tap into this high potential market,” Suah laments. “Everything is built with the younger generation in mind.”
In China, for example, prices of property in big cities are so inflated because young men are rushing to own apartments in order to secure a bride. Beijing is an example where prices has shot up 30 times more than a young Chinese’s average annual income due to gender disparity so developers keep building in this market segment, conveniently forgetting that this generation will soon be adding to the pool of elderly in China and tipping the aging population scale further.
The boom in Australia’s retirement villages is a good example of how the government and developer’s initiative can drive the success of this long neglected market segment as an alternative investment. For the longest time, retirement villages have been the least attractive segment of the broader Australian residential market. But recognising the potential threat of the declining birth rate and aging population, Australia started looking into their aged care and retirement villages provision seriously.
A strong framework for certification and policy was set, funding was increased and the aged care workforce was bolstered. Between Q4 of 2014 and Q2 of 2015, more than AUD1 billion worth of transactions took place. Lend Lease, Australia’s largest owner, operator and developer of senior living communities alone has reportedly outlaid AUD210 million in acquisitions, adding Retirement Alliance (Melbourne and Sydney) and two upmarket Waterbrook villages (Sydney) in their expanding portfolio.
Building for the Elderly
Retirement villages may not be the best aging population solution for every country, especially for those facing land scarcity like Singapore. But a well-planned environment and community that fulfils the characteristics of an aged-friendly community as outlined by WHO (see WHO’s checklist on page 32) is enough to elevate the pressure off the working-age population whilst serving the older generation. According to Suah, the HDB flats in Singapore have features that meet these requirements. “The HDB flats, especially the new ones are more elder-friendly than whatever you have in Malaysia and a few other Asian countries. They have community activities, nearby markets and foods stalls. Every level is installed with ramps and transportation is convenient,” reveals Suah.
“They are also allowed to add on fixtures that could facilitate day to day activity. It is important to have facilities, services and activities for the seniors—and keep the community alive and vibrant.”
Although the demand for aged-friendly developments in Southeast Asian countries is still relatively low, the need is increasing noticeably. According to Chris Yap, President of MIID, it is important for developers to build homes with designs and technologies that cater to the elderly. “The increasing need of aged care living and the inclusion of certain fixtures to meet this need in a development will enhance the marketability of a property in a positive way.”
“Some developers have considered the inclusion of secondary rooms on accessible floors for older occupants for awhile now, but none has gone into the details and the intricacies of it because the needs of the aged vary from individual to individual,” explains Yap. “The biggest constraint they face is of course budgetary followed by lack of expertise and technology when it comes to providing for the aged.”
Presently, there are only a handful of Asian countries that build with the older population in mind. But most of these projects are created to cater to the needs of high-income locals and expatriates, which defeats the purpose of creating retirement villages to solve aging population problem in the first place. Development projects such as Vantage Bay in Iskandar (in planning phase) and Retirement Village in Jenai (in planning phase) are targeted at Singaporeans who wish to retire in Malaysia; while Koh Samui Retirement Village and Care Resort in Chiang Mai, Thailand; and Singapore’s first retirement village, St Bernadette Lifestyle Village in Bukit Timah beckon middle to high income retired expatriates.
Suffice to say, there needs to be an adaptation to the aged – policies and the provision of services to meet the demands of an aging population across all income groups in order to shift the investment pattern towards the high potential retirement villages.