More than 12 per cent of Hawke's Bay people over 75 are choosing to live in retirement villages, says Retirement Villages Association executive director John Collyns.

Visiting the region to talk with association members, he said Hawke's Bay's 75-plus population grew by nearly 500 between 2015 and 2016, with 12.4 per cent choosing to live in a retirement village in 2016.

The New Zealand rate is also 12.4 per cent.

He said a retirement village was one way of beating the problem of finding a modern home when people wished to downsize.

Advertisement

"Housing stock nationally has continued to rise in size to an average of over 200sq m while the average household size has fallen from 3.5 people to 2.5," he said.

"So if an older person wants to downsize they find it difficult to purchase a home smaller than the one they left, unless it is an older home."

The majority of retirement village houses were one and two bedrooms.

"People are selling their family home and moving to a retirement village, releasing equity which can be tens of thousands of dollars."

He said a Cresar study showed retirement village residents enjoyed more cash in hand than people that hung onto their homes - 60 per cent of retirement village residents had more than $50,000 compared with 38 per cent. Twenty per cent had more than $200,000 compared with 5 per cent.

"Realising equity is just one reason why people choose to move to a retirement village but the current record prices for real estate underlines that rationale.

"It can be like winning Lotto - some new residents have more money than they have ever had and most are choosing to invest it, support their families, or indulge in a tour."

The Retirement Villages Act gives residents of registered villages right of tenure, which a mortgagee has to honour, and controls village operations.

Advertisement

Residents typically pay a capital sum for the right to live in a village for as long as they wished.

At the end of their occupancy a percentage of the initial capital sum, usually between 70-80 per cent, was repaid to the resident or estate.