The Bay of Plenty tops the country for retirement village living, with the highest proportion of over 75-year-olds choosing to live in villages, according to a new report by Jones Lang LaSalle.
The report shows that 17.4 per cent of the Bay of Plenty's population aged over 75 years chose to live in a retirement village in 2016, compared with 12.4 per cent nationally.
However, experts said that a far greater proportion of aged people across New Zealand still preferred to stay in their own homes and communities. They also noted that some of the Bay of Plenty demand was being generated by inward migration of retirees, combined with the considerable supply of retirement villages in the region.
"Ultimately, demand continues to exceed supply with retirement village living now accepted as a mainstream housing option for older people," said John Collyns, executive director of the Retirement Villages Association (RVA).
The region has an 11 per cent share of the national market with 4155 residents living in 3196 units in 41 villages. The development pipeline is large and growing; 12 villages have plans to expand by 979 units, and a further five new villages with about 360 units are at some stage of the design, consent or construction phase in the region.
Mr Collyns said affordability of retirement village living compared to housing was one of the core drivers of growth, alongside the comprehensive consumer protections and availability of care offered.
"As record real estate prices continue, releasing equity from the family home has become a more overt driver of retirement village growth."
Kay Saville-Smith, research director of CRESA, which has done extensive studies on the sector, said there were two main drivers for older people downsizing - releasing equity for a variety of uses, and anxiety about their ability maintain larger houses.
"Many people do get significant equity released when they downsize," Ms Saville-Smith said.
"But the biggest single minority moving to a retirement village tend to use that money for ongoing health care, whereas downsizers within the community tend to use their money for things like assisting family or travel."
Jennifer Custin, from Grey Power Tauranga and Western Bay of Plenty, said older people now were much more conscious of their health and diet. Many people in their 80s and 90s were continuing to live in their homes, she said.
Age Concern chief executive Stephanie Clare said older people were tending to live longer. Some were choosing to age in place in the home they'd lived in their whole life, but the retirement villages provided an option.
"The key is to ensure that everyone is fully informed and older people are allowed to make their own choices."
The Jones Lang LaSalle report
• Estimates that with the number of people aged over 75 set to increase by 164 per cent by 2043, there will be demand for 1654 new units each year in New Zealand between 2016 and 2043.
• Between 2015 and 2016, unit numbers increased by 1,861, or 36 units every week.
The major problem for village residents is the unfairness of the sales contract, says Dick Wilkins, national secretary of the Retirement Village Residents Association, who lives in Tauranga's The Avenues.
Retirement villages do not sell title to the units, but a Licence to Occupy (LTO). And when an occupier moves out, they (or their heirs) are paid only the original purchase price, less 25-30 per cent deducted by the operator.
More importantly, not only do they not share in the increased market value of the LTO, which can be significant, but they have to repay any losses if the licence declines in value.
"It's an unfair contract," said Mr Wilkins. "We don't share in the profit, but we're required to make up any loss."
However, given the recent buoyant market, losses had not been problem, he said. Mr WIlkins added that the decision to move into a retirement village, was usually lifestyle-related rather than financial.
"Generally, all the residents are happy and quite often they think they should have made the decision earlier."