More than 300 new retirement units worth $34 million are being built in the region to accommodate the growing elderly population, bringing an additional 250 jobs to the city.
The units are being built in response to expectations Rotorua's elderly population will double in the next 10 years.
However, a local Age Concern representative says the units won't meet the urgent need for affordable pensioner housing.
In a new report, the Retirement Villages Association of New Zealand (RVA) said there were 861 units across the Rotorua and Whakatāne region but 390 more were under development.
The units will be built at five local villages, including 30 new units at Regency Park and 66 units which will form the new Lynmore Rise Retirement Village.
Construction of the units will see a 45 per cent increase on the current number.
RVA executive director John Collyns said it had commissioned new research to look at the contribution new villages made to the local economy.
In 2017, day-to-day operations in the retirement village industry contributed about $1.1 billion to the country's GDP.
Collyns said the new units would see an injection of about $34m in design and construction costs and create an additional 250 jobs in the villages' operations.
"Another benefit is each house sold by somebody moving into a retirement unit releases a family home back into the market for other buyers.
"Nationally about 4500 houses are released each year."
He said the operators wouldn't be building the new units unless they were confident they were going to fill them.
First National Rotorua principal Ann Crossley said she had personal knowledge of the demand for retirement villages, noting that many elderly - including her parents - were on a wait list.
"There's the group of elderly that are waiting to get into a retirement village because they need that extra medical support but we also have this group of fit elderly who are sitting in their family homes and would be happy to downsize if there were nice, townhouse-style units available."
Crossley said although not all the units would be taken up by locals sitting on local properties, the injection of the units into the market would help ease Rotorua's housing shortage.
"If these units all came on to the market at once and got snapped up, theoretically it could free up a considerable amount of family homes."
Collyns has travelled the country talking to the elderly population about retirement villages.
He spoke to about 80 people at the Arawa Bowling Club on Wednesday.
"It's not about glorifying retirement villages. Because we aren't aligned with a private company we can offer a perspective and advice on how to decide and whether it's right for them."
The average retirement village unit, outside of Auckland, is about 273sq m, which translates to about 36 units per hectare.
"This compares favourably with a conventional housing development of around 16 units per hectare, or 600sq m each," Collyns said.
He said retirement villages also provided "purpose-built, age-appropriate, warm, comfortable and secure homes for older people".
"Retirement village operators take their role seriously in the care of older people.
"There is no doubt that the boom in retirement village development not only adds significantly to the local economy via investment and employment, but it also has valuable social develop."
Age Concern Rotorua manager Rory O'Rourke said it was fine to see more places for people to go but it was all about affordability.
"I would like to see pensioner flats as an option other than private rest homes.
"It's about affordability and there are a lot of elderly who cannot afford it unless they are subsidised into it."
He said the Rotorua Age Concern branch saw three or four people come in a week asking for help with housing.
"One of our biggest concerns is there are fewer rentals and the ones there are, are too expensive."
Age Concern works towards keeping elderly people in their own home, often the one they brought a family up in.
"It's about downsizing people who aren't ready to go into this type of home, but those sorts of small homes aren't available," O'Rourke said.
"There are already about 10,000 retired people in Rotorua and that will at least double in the next 10 years so it's going to be a real headache for us then if we don't start doing something about it now."
He said his advice to younger people would be to start saving now.
Grey Power Rotorua president Miriam Ruberl said affordable housing was its main concern.
"There's a big difference between what people, who are in their 70s now, expected they would have at their retirement and what is now affordable."
She said her question would be about how freely available the information was for people when making the decision on retirement homes.
- Engineers, quantity surveyors, architects and other technical and business professionals.
- Builders and other tradespeople, site managers, building product suppliers and people involved in land subdivision and site preparation
- Labourers delivering civil works
- People involved in the supply and fitting out of furniture, fittings and equipment retailing.