Residents who are now more accustomed to higher-density living are shaping the future.
A scarcity of suitable development sites in established areas, and the evolving demands of village residents, is forcing the emergence of new trends in retirement living, says Anthony Long, who has just been promoted by Colliers International to the role of associate director with a focus on the retirement village and aged care sector.
Long, who has 15 years' experience in property valuation, joined Colliers in 2008 after having worked for DTZ in London.
He now joins seven other directors and associate directors in the Auckland based valuation and advisory team.
"Traditionally, retirement village developments in New Zealand are low density, featuring individual villas arranged around a community centre over large sites," says Long. "However changing demographics, a scarcity of sites in established residential areas and future residents being more accustomed to higher-density living are shaping the retirement villages of the future.
"While the low density villages will still be in demand, we will see the construction of higher-density facilities incorporating trends seen overseas, including developments associated with sporting and hotel complexes as well as more environmentally-sustainable villages."
New Zealand's ageing population and the associated increased demand for retirement living and aged care facilities have been well-publicised, says Long.
"There is a growing demand for healthcare accommodation for older people in both of the industry's subsectors: aged care, where residents receive rest home, dementia and hospital level care; and retirement living, where older people live independently or semi-independently in villages.
"However, while the demand for aged care beds is increasing, the construction of new facilities is restricted with the current government funding model unable to provide a return on the capital cost of land and construction."
As a result, the growth of beds is coming from existing facilities extending over surplus land, or from retirement villages also incorporating an aged care facility and providing a continuum of care.
Long says the aged care property sector, which is characterised by a mixture of institutional and private ownership, will be defined by larger facilities achieving greater economies of scale as cost pressure continues to build at a greater rate than funding growth.
In contrast, the retirement village sector is unconstrained by government funding, he says. "Retirement villages are resident-funded, with values influenced by supply and demand, the type of product offered and residential property values in the general vicinity."
Long says the larger retirement village operators in New Zealand, such as Ryman, Summerset Group and Metlifecare have been actively acquiring proposed village sites, particularly on greenfield land on metropolitan fringes where future population growth has been identified.
"Outside the land acquisition market, activity in the retirement village property market has been very subdued since mid 2007, with only a handful of villages changing hands. This follows a period of significant institutional investment activity during the mid 2000s, during which substantial retirement and aged care portfolios were accumulated, particularly by Australian institutions."
He says the low level of activity is a reflection of these assets being a long-term hold with very few opportunities to purchase, rather than the existing market conditions.
Kane Sweetman, national director of valuation and advisory, says Long will continue a focus on the retirement village and aged care sector in his new role, as well as conducting land development valuations across all sectors.
"Since joining the team four years ago, Anthony has built up a wealth of experience and contacts in the aged care sector - an invaluable skill set, considering the upcoming demand for retirement and aged care beds in New Zealand. We hope to leverage Anthony's skills and experience to enhance our extensive track record in the retirement and aged care property valuation sector."