Alan Kohler's article makes a clear distinction between retirement villages and hostel/nursing home care.
They are entirely different.
Retirement villages are becoming very luxurious and sophisticated. They do not provide any care, simply your own villa or unit in which you can live as independently as you can in the general community. Some will build whatever you want, even a stand alone house with five bedrooms, double garage, own pool etc. Some of them now are like five star resorts, with restaurant, bar, dance floor, multiple hobby workshops, indoor and outdoor heated pools, tennis courts, bowling greens, golf driving ranges, and are often set in very attractive surroundings.
They provide lots of activities for those who are interested or if someone prefers to keep to themselves, that's fine too.
Yes, the deferred fees are extraordinarily high. But many people are happy to pay, e.g. between $600K and $1.2 million or more (this does not buy you the land, just the dwelling) when they no longer want to worry about maintaining a large garden, mowing lawns, cleaning a pool. If so much as a smoke alarm battery needs changing, just pick up the phone and someone will be there to do it for you.
These same people also apparently enjoy the built in social life and support of being surrounded by others in similar circumstances. No yelling kids, no cars doing burnouts in their street. Their property meticulously maintained if they go on a cruise for a couple of months.
As far as the weekly fee not being justified, I haven't looked into all the figures enough to know about that.
But it's pretty expensive to pay all the council rates (which are included in the weekly fee), maintain very large pools heated to 30 degrees year round, maintain all the other facilities, run a village bus to various places daily etc. for peanuts. The people I know in such places are paying about $160 p.w. which doesn't seem unreasonable to me for all that provided and no effort required.
My mother went to one of these retirement villages in NZ for a few years before she died. She was far happier than she was when worrying about the maintenance on her own house. She had a beautiful, modern villa and the staff couldn't have been more helpful whenever required. She quickly made new friends and just loved these last years of her life. So for her it was absolutely worth whatever it cost, roughly a third of her purchase price in deferred fees.
A few retirement villages - mostly the older ones - do have hostel and nursing home facilities close by, but as already noted above, completely different financial requirements apply there. I know these changed from 1 July but don't know the details.
I don't agree with Alan Kohler that it's any sort of scam or rip off. Those terms imo apply when the contract conditions are not transparent. No retirement village whose documentation I've ever read has been anything but absolutely clear about the fees involved.
From Kohler's article:
There are a variety of deferred fee schemes contained in retirement village contracts and they all rely on the fact that when an elderly couple signs it, they tend not to pay much attention to what might happen to the assets when they die.
They usually don’t get legal advice and don’t really understand that the village owner, typically a property development company, will get a “deferred fee” of more than $100,000 when it’s time to move on to the next phase of life, or death.
(Bolding is mine.)
Well, whose responsibility is it? The retirement village lays it out absolutely clearly. It's up to the prospective client to do their own research, read the documents properly and take it to a lawyer who specialises in the area.
It's a growth industry. The development companies are there to make money. They are not scamming anyone.
People can accept the terms or look elsewhere.