Retiree lifestyles vulnerable to ‘greed’
The ‘‘greed’’ of children shouldn’t override parents when it comes to cashing up the family home, according to the executive director of the Retirement Villages Association, John Collyns.
He said if children hindered sale of the family home against parents’ wishes it was ‘‘tantamount to elder abuse’’.
Keeping the family home delivered more to children when parents died but reduced the cash parents could use for travel or family support, he said.
‘‘Releasing equity’’ could be like winning Lotto – delivering more money to elderly people than they ever had, Collyns said.
Figures compiled by social research group CRESA showed that about 60 per cent of retirement home residents surveyed had $50,000 cash or more, compared with 38 per cent of elderly homeowners whose money was tied up in their house.
The downside is the fee the elderly parent or their estate relinquished when giving up the ‘‘right to occupy’’ licence paid for a retirement village unit.
It could vary between 20 per cent and 30 per cent.
For example, Ryman Healthcare charges 4 per cent in fees a year capped at 20 per cent.
Ryman spokesman David King said if someone bought a unit for $400,000 and relinquished it a year later, they or their estate would get 96 per cent of what they paid, or two years later 92 per cent, with the 20 per cent cap reached after five years.
King said the fee is used for amenities and delayed maintenance to spruce up units with new carpets and fixtures for the next resident.
The complaint that departing residents or their estate don’t enjoy any capital gain could also work against retirement village operators when the price growth of property was slow or static, King said.
Repayments to an estate could take months depending on the length of time for a re-sale.
Collyns said the property market was a topic of discussion at a Retirement Villages Association forum at a Bupa village in Rangiora this week.
He said buying into a retirement village was an investment in lifestyle, security, companionship and comfort with the tenure protection provided in the Retirement Villages Act.
Villages were aware of the benefits of social interaction with different age groups, and some villages in Australia incorporated childcare centres while a few had families living near or within them, he said.
About 12.4 per cent or 27,000 people over the age of 75 live in the 383 registered retirement villages in New Zealand.
The rising number of superannuitants has led real estate forecasters such as JLL to predict this will rise to 64,000 in 2038 based on the 12.4 per cent penetration rate, but could double if more chose retirement villages.
Meanwhile Ryman, with 31 villages, has received consent for a third Melbourne village at Monash. The $400 million Brandon Park development will include 328 two- and three-bedroom apartments, 199 care rooms, 94 serviced apartments and amenities.