More retirees opting for village living
Over 40,000 people now live in retirement villages, and it’s not just the big operators who are expanding, reports Anne Gibson
More than 40,000 Kiwis now live in retirement villages, says an in-depth investigation of the multi-billiondollar retirement sector.
The number of residents and the number of villages are both at a record, says the study by JLL, and another 2268 people moved into villages in the past year. However, planned construction has slowed.
Lisa Chen, JLL senior research analyst and report author, said she was surprised by some of the trends the study revealed: “The rise of new developers and niche villages was one. The market is proliferating over time but new developers and owners are concentrating on smaller, niche villages in a wider range of locations”.
Operators offering more colocation of retirement villages and aged care facilities for residents was
another major trend, “with more developers having aged-care facilities on-site, which makes sense because as people age, they need more care.”
Chen said the reason the 40,000 barrier had been broken was “because demand has always been there in this sector. It’s just that now, supply is catching up.”
In 2017, said JLL, 38,741 people lived in New Zealand retirement villages, but by late 2018 that had risen to 41,009 people.
New Zealand has 31,545 retirement village units, up from 29,801 the previous year, JLL said.
And soon we will set another record, with 400 villages. By late last year there were already 399 retirement villages, up from 382 in 2017.
An extra 11,800 units are being planned throughout the country, but the growth rate has slowed lately.
The New Zealand Retirement Village Database 2019 says an extra 7000 Auckland units are planned, 2700 in the Waikato and 2100 in Canterbury.
Two-thirds of village expansion is planned in those three areas, says the JLL study.
Last year, JLL found 12,163 new units were planned throughout the country, so the pipeline dropped by
363 units between 2017 and 2018. John Collyns, executive director of the Retirement Villages Association, attributed that fall to two factors. “First, it is due to constraints in supply such as getting tradespeople to do the work and second, the housing market has slowed compared to where we were 18 months ago. I suspect some people will defer expansion until the market recovers.”
JLL says Ryman Healthcare, Metlifecare, Bupa, Summerset, Arvida and Oceania owned 17,266 units in 2017, rising by 3.9 per cent to
17,945 units last year.
The big six operators plan 8900 new units. Seventy per cent of those new planned units will be developed
in the golden triangle between Auckland, Hamilton and Tauranga, JLL says.
While the report doesn’t say so, the overwhelming majority, or 87 per cent, of New Zealanders aged 75-plus do not live in retirement villages.
Last year, 13 per cent of 75-plus Kiwis lived in such villages, up from 12.6 per cent in 2017.
“With just over 31,500 retirement village units now in New Zealand, there is an attractive geographic spread which covers much of the country, although naturally many schemes are located in the most populated areas,” the study says.
“Our analysis suggests that the
75-plus years’ participation rate in retirement villages was 13 per cent in
2018, which was an increase from the
12.6 per cent recorded the year before.
“The highest 75-plus regional population participation rate was in the Bay of Plenty with 18.5 per cent, followed by 17.5 per cent in Gisborne and approximately 16.5 per cent in Auckland,” the study says.
JLL said last year that New Zealand had 382 retirement villages with
29,801 units.
“The number of villages held by the big six only increased by one in
2018, whereas the sector as a whole saw 12 other villages opened by nonbig six operators. This shows that in our view, the market is proliferating over time but that new developers and owners are concentrating on smaller, niche villages,” the study says.
Graham Wilkinson, director of the privately-owned Generus Living Group which is expanding fast, said non-NZX listed businesses were busy.
“There’s people like myself and others,” he said, citing Fraser Sanderson of Sanderson Group and Guy Eady of BeGroup. “Anyone can be successful if they have the right location and offer.”
Wilkinson said the JLL report was one of the most comprehensive surveys of where the industry is, and was highly regarded.
JLL said Ryman had an estimated 19 per cent of New Zealand’s total village units, followed by Metlifecare with 14 per cent, owning a third of village stock between them.
Bupa’s units declined in the year and that organisation is the only one of the big six which is not listed on the New Zealand stock exchange.
Summerset had the biggest increase in its number of units, up by 229 units from 2017 to 2018, followed by Ryman with an extra 188 units and Metlifecare up 153 units, JLL says.
JLL also recorded changes in the aged-care market, which includes rest homes, hospital and dementia care places.
Twelve facilities were “removed from the market” in the last year, but eight were added, “which resulted in a net decline in aged care facilities from 676 to 672”.
But total aged-care facility bed numbers rose by 128 “as new developments were considerably larger than the ones removed from the sector”.
Three hundred extra aged-care facility hospital beds were added, consistent with rising demand for higherlevel care as the population ages.
Yet much of the rise in aged-care facilities was within retirement villages, JLL notes.
The number of villages held by the big six only increased by one in 2018, whereas the sector as a whole saw 12 other villages opened by non-big six operators.
JLL report