Retirement villages booming
Retirement village growth across the Otago region is soaring as private and notforprofit operators seize the opportunity to meet significant existing and forecast demand. Business editor Dene Mackenzie talks to Retirement Villages Association chief exec
MORE than 1420 new retirement village units have been proposed or are under development in Otago and high property prices in places like Auckland are helping drive demand for a southernstyle retirement.
Retirement Villages Association chief executive John Collyns was in Dunedin this week to talk to his members and explain the trends being seen for this region.
‘‘There is a lot of activity in Dunedin. But we’re also seeing very strong growth across the region in areas such as Oamaru, Balclutha, Mosgiel and, in particular, QueenstownLakes and Central Otago.
‘‘Interestingly, it’s the private and notforprofit operators who are seizing the opportunity.’’
Some of the major projects either proposed or in the early stages of development included Golden View Retirement Village, in Cromwell, the Clyde Retirement Village, Leaning Rock Retirement Village in Alexandra, Roys Bay Estate, in Wanaka, alongside projects such as the Observatory Hill Retirement Village, in Oamaru, and the popular Aspiring Lifestyle Village, in Wanaka.
The key drivers of growth included the increased awareness of the benefits of retirement village living, Mr Collyns told the Otago Daily Times.
Comprehensive consumer protections and availability of care, the attractiveness of the region to domestic and international babyboomer retirees, and the equity release benefits of retirement villages all appealed to people considering moving into the villages.
With the Auckland housing market driving up prices exponentially in nearby regions and beyond, releasing equity from the family home had become a more overt driver of retirement village growth.
‘‘Research has shown retirement village residents generally release more equity downsizing from the family home than those who buy a small ownyourown unit.’’
And because people had spent holidays in Wanaka, Queenstown and Central Otago at some stage during their working lives, the attraction to retire in those areas became strong for cashedup North Islanders, he said.
There was an expectation places like Wanaka and Queenstown would continue to attract outsiders because the populations of both places were ‘‘relatively young’’.
Retirement villages usually reflected the areas in which they were built.
Those in Mosgiel attracted people from Mosgiel and its surrounding areas, and from the southern edge of Dunedin. Prices reflected the average incomes of the area, giving people a chance to release equity, move into the village and have money left over.
For many people, moving into a purposebuilt village unit was the first time they had lived in a new house, Mr Collyns said.
‘‘People who have a decent lump of equity left don’t have to make any lifestyle choices.
‘‘They can still do their trips, buy a car and visit their grandchildren because they have money left in the tin.’’
Retirement villages brought jobs and discretionary spending to each community in which they were built. It was estimated a 160unit retirement village in Nelson injected $2 million a year in wages into the community, on top of the construction costs, which were considerable.
Most of the money would be spent in the community.
Asked about growing demand, Mr Collyns said people now had much less trouble selling their houses than during the global financial crisis. But even when the GFC was hitting hard, demand was still high. It just took people longer to sell their houses.
The latest figures showed 12.4% of people aged 75 and over lived in a retirement village, up from 9% five years ago. As the population continued to age, there was no reason to not expect that percentage to rise.
At 80, people wanted warmth and comfort, money, companionship and a pathway to care.
‘‘We don’t think that will change but us babyboomers will want more, like a barista, WiFi and a happy hour that does not include cask wine.’’
People who were born in the 1930s and 1940s had different expectations. They knew hardship and had gone through a war. Having good security and companionship meant a lot to them, he said.
Age Concern surveys identified loneliness as being as much of a killer of older people as smoking. After a lifetime of work, staring at four walls was miserable, Mr Collyns said.
‘‘Our generation is looking for access to security and the freedom to do our own thing. And we need to know if we need care, it will happen. Sixty might be the new 40 but 80 is still 80.’’
Village operators were now building technology and infrastructure into their units today people would need in five and 10 years’ time, Mr Collins said.
Fitter people with money often wanted to travel and the best part was leaving their units locked up securely with someone to watch over their property while they were away.
However, some people would not have enough equity to buy into a retirement village, and the association acknowledged that, he said.
About 20% of people aged 65 and over did not own their own property. Traditionally, people needed equity to get into a retirement village and as an industry, retirement village operators did not provide social housing for people who needed it.
‘‘We have no ready answers but we do know there is a strong need for social housing. This is an issue operators are working on, as they do know there is a need.’’
Ultimately, demand continued to exceed supply as retirement village living was now accepted as a mainstream housing option for older people. Not only did it deliver proven social and health benefits for residents, but it helped address New Zealand’s increasing housing supply issues by enabling people to realise equity, move into an affordable, comfortable, purposebuild home and free up their home for another family to live in, Mr Collyns said.
dene.mackenzie@odt.co.nz
❛. . . us babyboomers will want more, like a barista, WiFi and a happy hour that does not include cask wine❜