Every year, thousands of older New Zealanders make what could be their last big financial decision: to stay put in their own home, or sell and move into a retirement village.
The villages' advertising focuses on the things that make the second option appealing: retirement village life appears to be an endless round of bowls, organised shopping trips, swimming in the heated pool, snacks in the on-site café, beauty clinic visits and an endless supply of new friends - all with someone else doing the chores, from weeding the garden to changing a light bulb.
Attractions like that obviously appeal to a lot of people: about 47,250 Kiwis now live in retirement villages, according to research by real estate agents and consultants JLL, which regularly surveys the state of the industry.
Given that New Zealand's 75-plus population was 332,000 last year, according to Stats NZ, only about 14 per cent of people in that age group live in such villages, but their number is growing. In JLL's most recent annual report, to the end of 2020, it forecasts that the number of residents will increase by more than 34,000 people by 2033, pushing the total village population to just over 81,000.
That report tallied 422 villages throughout the country, and at this stage JLL is expecting demand for about 26,000 more units by 2033.
But choosing whether you want to embrace the retirement village lifestyle isn't always easy. And if you do find it appealing, how do you decide between the competing villages, all making similar claims about the wonderful facilities on offer?
Even before getting to that point, the choice about moving in starts with whether you own your own home or are renting: most elderly tenants aren't in a financial position to join the ranks of village residents.
Where you live now, whether you're mortgage-free, or how much debt you have, if there is a village in your area, your savings, family, health, planning for the future and other personal circumstances are all among the deciding factors.
And if a retirement village is the desired option, choosing one involves finding answers to a lot of questions: which village operators fix their weekly fees, for example; when you sell, or die, how much do they keep of your initial purchase price; and which village chain offers the best licence to occupy?
Those were some of the questions the Herald put to Paula Bishop, managing director of Village Guide, which bills itself as a comprehensive guide to the country's retirement villages.
Bishop set up Village Guide in 2015. Her business says it is "an independent, impartial guide to retirement villages and care homes in New Zealand". Bishop acknowledges she is funded by the owner/operators, but says the idea behind Village Guide is to give people information before they move into a village.
"I spend a lot of time speaking to both seniors and also village operators," says Bishop. "Every article I've read on this topic comes from either the perspective of operators or residents. But I offer a unique view, in that I work within the industry but I'm unbiased. I advocate for both residents and operators and I see both sides daily."
Some of the key issues being addressed right now include retirees not getting capital gains as their units rise in value, uncertainty over buyback periods and issues when people move to a higher level of care.
The Herald asked Bishop to compare the major owner/operators so people considering buying a licence to occupy a village unit would be better informed about some of the key questions to ask and what's being offered.
Bishop's initial response reveals why intending residents might find the process daunting: "I was a little optimistic when I said it wouldn't take long to gather the information," she said after first looking into the comparison.
"One operator made it easy via their website but for the others it was largely a process of reading disclosure statements and comparing three or four aspects from the same operator to ensure consistency."
For many people, the choice will be relatively straightforward: they will choose a village based on its location, maybe because it's in the area where they have lived for many years, or close to friends and family.
But aside from geography, there are other factors to consider. Among the issues Bishop looked to answer were:
• When you move in, is there a money-back guarantee if you change your mind?
• Who pays to maintain chattels owned by the village, but within your home?
• Is there a charge if you want to transfer to another unit?
• When you leave, or die, how much does the village charge as a "deferred management fee"?
• How long is it before you or your estate are repaid, and does the village pay interest in the meantime?
To help answer questions like those, Bishop has compiled a series of one-off tables for the Herald as a guide for consumers.
"I've had to strike a balance between keeping the table simple and offering enough information so details are interpreted correctly," she said. "For example, take the question 'do operators charge transfer fees?' In almost all cases it was dependent on the home or accommodation the resident was moving into."
But she did find key information which could give a comparison between the big owner/operators.
"On the favourable terms front, all six owner/operators offered a money-back guarantee over and above the compulsory 15-working-day cooling-off period," Bishop said.
Five of the six also have fixed weekly fees, which gives certainty to older people on fixed incomes that their living costs will not suddenly blow out.
Five of the six also pay interest to an estate, or a resident, if a home has not been re-licensed after six to nine months, she found.
That is one of the big issues in the sector right now: as things stand, there is no limit on how long a village owner/operator can keep someone's money if they become ill and perhaps need to move from an independent unit to a hospital bed – or they die.
Bishop said she also found some less favourable terms shared by the big six.
"Information was hard to find around repairs/costs of operator fixtures and chattels. Often documents referred to fittings but not specifically to chattels such as operator-owned whiteware," she said.
And while most operators charge transfer fees when a resident moves between units, it was difficult to gather exact information, with some operators saying fees are applied on a case-by-case basis.
Bishop said the big six she studied and found data on for the Herald own about 42 per cent of New Zealand villages, according to the JLL survey. "Because the size of these six owner/operators' villages are larger on average, they make up nearly 60 per cent of the national unit or village home numbers," Bishop said.
Another source of information for potential retirement village residents is the Retirement Commission, which offers resources to help with making decisions, and questions to ask.
A big shakeup in the sector is being recommended. Retirement Commissioner Jane Wrightson wants a review of the law surrounding retirement villages, saying it has not been updated in nearly 20 years.
Wrightson this month released an assessment of the legal framework surrounding retirement villages, based on 3254 submissions. She said the most discussed issues were the amount of time it took operators to resell a property after a death, the fact that there were no shared capital gains, and that weekly fees sometimes continued after a death or hospital admission. The commission also noted problems with the complaints system, confusing documentation, and the difficult relationship between village and care facilities.
The commission said areas where there was general agreement on the need for a review relate mostly to better disclosure of the conditions for going into a retirement village and also for transferring to care. "There is general agreement that the resale and buy-back process should be reviewed to ensure better disclosure."
However, noted the Retirement Commission, the people who live in retirement villages "generally report high satisfaction levels".
Poto Williams, Associate Housing Minister, with responsibility for retirement villages in her portfolio, also wants change.
She would like the owner/operators to make contracts simpler and set up a better dispute resolution system, to go some way towards correcting the inherent power imbalance between owners and residents.
The Retirement Village Association says it will investigate.
Bishop wants only careful reform: "The current legislative framework strives to be fair to all parties, but as with any sector, regular reviews and refinements are necessary. The challenge is to make considered changes that continue to protect residents, while ensuring operators remain in an economically strong position."