String of 7 closures hit NZ rest homes, Mission Bay latest to go, 29 elderly residents out

Mary MacKillop Care at 56 Selwyn Avenue, Mission Bay. Photo / file

Seven charitable, privately-owned, not-for-profit rest homes have shut in the past three years, with an established Auckland facility the latest as the sector faces mounting costs.

Throughout New Zealand, smaller rest homes are shutting fast while the multi-billion-dollar NZX listed retirement industry opens new hospitals or rest homes as part of its villages - but only for those who can afford it.

Yet around a third of New Zealanders die in rest homes, one study found.

Mary MacKillop Care Auckland provided rest home care for nuns and people from the wider community on a stunning seaward-facing 2.1ha Mission Bay site at 56-66 Selwyn Ave, valued by Auckland Council at $52 million.

But the rest home there has now shut after owners the Sisters of St Joseph of the Sacred Heart decided to exit aged care, meaning 29 people had to find new homes, some moving to retirement villages. All residents have now left, a spokesperson said this week, while other religious activities stay on the site.

Mary MacKillop Care has shut but the sisters will retain the property. Photo / Google Maps

"In terms of the future use of the site, the sisters will be retaining it and will be looking to the future care of its own ageing sisters. The vision is to care for them in supported accommodation at Mission Bay, however, details are yet to be finalised."

That follows last year's closure of Whanganui's Nazareth Rest Home, owned by the same order.

Sister Ann Neven, chairwoman of the sisters' trust board, attributed the Whanganui closure to the rest home running at a loss. Of the Mission Bay closure, she said an Australasian decision was made by the order to leave rest home care. Mission Bay was the last facility of its type in Australia and New Zealand, she said.

She pointed to financial difficulties, saying the aged care sector was "vastly different" to what it had been when Mary MacKillop Care was established: "It makes for a challenging environment for small not-for-profit facilities like ours."

Nazareth rest home, Whanganui. Photo / Stuart Munro.

The nuns' Auckland and Whanganui rest home closures follow the 2017 announcement of Remuera's popular 108-bed Caughey Preston home, leaving more than 100 residents to find a new place. That business lost $1.1m in its final year.

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The trust which ran it said that rest home had opened in 1950 and its objective had been to deliver care "second to none" in an environment where clients and their families were the key focus.

Last year, the social services arm of the Anglican Diocese of Christchurch said it would exit the aged care sector and wind down its Bishopspark and Fitzgerald retirement villages with 38 and 87 beds respectively.

The 19-bed Ruawai Rest Home in Fielding shut last year after 25 years.

Graham Wilkinson's Generus Group redeveloped the Ranfurly Veterans' Home in Mt Albert/Mt Eden as a retirement village, expanding that operation.

Nazareth Rest Home staff leave: Helen Ivory, Mary Fowler, Annemarie Powell-Carroll and Julie Jones. Photo / Stuart Munro

In March this year, plans emerged to shut Invercargill's Takitimu rest home meaning 30 people could lose their jobs and 18 residents would need to move.

New Plymouth's Mission Rest Home, run by a charitable trust, said in June last year it would shut. At the time, about 10 residents remained.

NZX-listed businesses such as Ryman Healthcare are taking over where the nuns and other charities are leaving, using a far more commercially-focused model yet catering only for those who can pay.

Troy Churton, retirement villages national manager at the Commission for Financial Capability said more than 70 per cent of commercial retirement villages now have hospitals or care facilities on-site. More than half New Zealand's care or rest home beds are on retirement villages sites, a fast-growing sector due to the financial model which returns massive profits.

"We don't monitor rest homes but we do monitor retirement villages. We do see the overall net deficit of stand-alone new rest homes per annum against those closing, and the increasing number of villages that co-locate care facilities on the village site essentially plugging that deficit," Churton said.

Sr Neven said the order's administration office and retreat centre would continue on the site. There is no plan to sell the valuable land which incurs an annual rates bill of $67,000.

Caughey Preston, now shut. Photo / Doug Sherring

"Sadly the closure does mean our staff, who have provided high-quality care to our residents, will no longer have jobs. We are committed to providing any assistance we can to help them find new employment, including providing specialist employee assistance support and counselling," Sr Neven said.

A Weekend Herald investigation this year found 651 aged care facilities.

Two years ago, a Labour/Green Party/Grey Power study found that of the nearly 700 aged care homes, 61 per cent are privately owned, 20 per cent owned by non-profit organisations, 19 per cent are publicly listed and 1 per cent have other types of ownership.

"Commercial providers in the aged care sector continue to grow. When the 2010 Aged Care Report was done it was estimated 32 per cent of the sector was not-for-profit. Today the New Zealand Aged Care Association estimates this to be 20 per cent. This has coincided with an increase in aged care facilities within the booming retirement villages and the closure and consolidation of smaller independently-owned facilities," they said in a September 2017 inquiry into aged care.

Caughey Preston, closure announced in 2017. Photo / Doug Sherring

Meanwhile, Ryman's AGM in Orewa in July heard of immediate plans for 20 new villages with 7000 new units and that "the boom is only just about to hit", in reference to New Zealand's baby boomers ageing, resulting in the company spending more than half a billion dollars annually on new stock here and in Australia.

Three years ago, the then-Westpac economist David Norman said despite the proliferation of retirement villages and success of Ryman, Summerset and Metlifecare, there was a "huge gulf" developing for those who cannot afford that level of care.

Small independent rest homes with 25 to 30 beds were closing due to tightening financial support from the Government, Norman said in 2016. Yet a third of Kiwis die in rest homes.

For New Zealanders who could afford it, privately operated retirement villages, with villas and apartments were increasingly popular, he said. But the Government contributions were too low and falling home ownership rates meant fewer seniors would be able to fund their own rest-home stay, Norman predicted.

Bill Rayner, Grey Power North Shore and Auckland community affairs spokesman said: "We are very concerned about the whole rest home sector. The smaller ones are struggling, with increasing costs such as rising worker wages while the big ones like Ryman with a transition for retirement village residents going into a hospital - you can't get in for under about $800,000. The pastoral care component is disappearing, while now it's the profit focus now - it's not the same."