The number of people in retirement villages is climbing.
The number of people in retirement villages is climbing.
Just on 50,791 people lived in retirement villages at the end of last year, according to a new study out today.
Gavin Read and Hina Imran, of JLL’s Auckland office research team have studied the multi-billion-dollar sector where major reforms are recommended by the Ministry of Housing andUrban Development.
In 2020, NZ villages had 47,200 residents, and by 2021, that climbed to 48,746 residents.
The biggest owner-operators are Ryman Healthcare, Metlifecare, Summerset Group, Bupa, Oceania Healthcare and Arvida Group.
The paper didn’t say it, but most people aged 75-plus don’t live in retirement villages: 50,000 is only a portion of the estimated 383,510 New Zealanders aged 75-plus today.
Most people age in their own homes. But the study certainly noted growth within that small village demographic population - comprising people who are usually wealthier and more likely to live in the upper North Island.
“JLL’s 2022 NZ Retirement Village Database identified 452 villages with 39,070 units, based on an estimated 1.3 residents per unit, resulting in an estimated 50,791 residents currently in retirement villages. By comparison, JLL’s 2021 NZRVD identified 425 villages, with 37,489 units, which resulted in an estimated 48,736 residents in retirement villages,” the new document out today said.
The study began in 2012, and since then, the retirement village population grew 32 per cent, from 343 villages to 451 villages.
Unit numbers within those villages grew 70 per cent from 21,815 in 2012 to 39,735 people over a year ago.
“The significant increase in unit numbers compared to the overall increase in village numbers reflects the continuing trend over the last five years that modern villages are generally larger in scale and feature greater intensification through extension or refurbishment,” JLL found.
Auckland has the most villages, with an estimated 23 per cent of the national stock.
JLL NZ head of research Gavin Read.
“The sector continues to see expansion, with several existing villages being extended and refurbished as new villages come online. The development pipeline we have identified suggests this trend is continuing. Therefore, the challenge for the sector is to ensure the units are delivered in the right locations to meet future residents’ demands and requirements,” JLL noted.
Of the 422 villages owned by the big six, around 65 per cent of those have a hospital with 19,300 beds, “50 per cent of the total aged care industry’s bed count”.
The study cited Statistics New Zealand data showing 308,140 New Zealanders aged 75-plus by 2018.
This year, that was expected to be 383,510, up 24.5 per cent in five years.
By 2043, the number of people aged 75-plus is forecast to increase by 376,120 to reach 759,630, up 98.1 per cent in 20 years, JLL said.
“The increase in population in this age bracket will continue to provide enormous demand for retirement villages,” the study said.
The impact of large populations in Auckland, Hamilton and Tauranga is likely to continue to be attractive to potential retirement village residents, continuing the demand within the golden triangle. It is estimated by 2033, the golden triangle area will equate to 46 per cent of the total population of those over 75 in the country, growing to 48 per cent by 2048, JLL found.
When looking at forecast growth in the regions for the 75-plus age group through to 2048, “surprisingly, Nelson is expected to have the largest growth”, JLL said, followed by Auckland.
Southland is forecast to have the lowest population growth, JLL found.
Earlier this month, Te Tūāpapa Kura Kāinga Ministry of Housing and Urban Development announced that retirement village owners could be forced to repay residents’ money within six to 12 months and be banned from charging weekly fees once people have left their places.
These are proposals for a long-awaited shake-up of the sector, with a discussion paper on changes.
Last year, the ministry said it would begin its probe.
Villages can keep charging weekly fees for months after residents die. They are not forced to repay a family estate or beneficiaries the money paid for a unit or bed once their relative has died. Nor are there any specific time constraints on these two aspects, which comes as a shock to some families grieving after a relative’s death.
But this month’s move was partly in response to calls for change, including from Consumer NZ, which in 2021 lodged a Commerce Commission complaint about what it said were “misleading” retirement village claims. Chief executive Jon Duffy said a major selling point for many retirement villages were the rest home facilities they provide if a resident can no longer live independently.
Advertising and marketing created an impression care was guaranteed, he said.
Anne Gibson has been the Herald’s property editor for 23 years, and has won many awards, written books and covered property extensively here and overseas.
