Skip Ribbon Commands
Skip to main content

News Release

New Zealand

Aging population supports strong demand for New Zealand's retirement sector


 

 

Grey Lynn office unit decked out for summer/new-zealand/en-gb/news/864/grey-lynn-office-unit-decked-out-for-summerAucklandGrey Lynn office unit decked out for summer
East Tamaki gem with new five-year lease/new-zealand/en-gb/news/863/east-tamaki-gem-with-new-five-year-leaseAucklandEast Tamaki gem with new five-year lease

​​New Zealand’s population is aging at an impressive rate, with the elderly now taking up a larger proportion of the population than ever before. As New Zealand’s population ages and acceptance of retirement village living becomes greater, penetration rates are increasing steadily, driving up demand forecasts and development potential within the retirement industry.

JLL’s Economist and Research Consultant, Angela Webster, has released the annual retirement villages NZ​ database (NZRVD) whitepaper to assist industry players in the RV sector to make more informed investment, development and service provision decisions; at a time when demand for retirement accommodation is growing.
 
The report highlights;

New Zealand’s population is aging at a rapid rate. The 2006 to 2013 census provides an insight to this impressive growth with an additional 111,429 entering the 65+ year’s age group, a growth of 22.5% 2006 to 2013, compared to a total population growth of 214,101 and 5.3% over the same time period.

The growth within the 65+ year’s age group is not expected to slow anytime soon, with an estimated increase of circa 114% between 2013 and 2043. The percentage of the population within this age group is projected to increase from 14% in 2013 to 24% by 2043. The growth within the 75+ year’s population subset is forecasted to grow at a greater rate than the 65+ age group reflecting the fact that New Zealand will not just have more elderly people moving forward but also this demographic is likely to live longer than previous generations.

The age of entry is increasing. JLL have looked at the median age of residents within mesh blocks which are largely made up of retirement village residents and noted the differentiation between the median ages of residents in the Census years of 2006 vs 2013 has likely increased due to the improvements in medical care and longer lifespans.

Increasing penetration rates is a major driver of retirement village demand generation. Penetration rates increased for both the 65+ and 75+ age groups. The 65+ age group increased from 4.5 percent in the NZRVD 2013 to 5.1 percent in 2014, and the 75+ age group changed from 10.5 percent in 2013 to 12.0 percent in 2014, giving increases of 0.6 percent and 1.5 percent respectively. Many areas in New Zealand are expected to achieve higher penetration rates in coming years due to the combination of an aging population, a greater acceptance of living in a retirement village and newer more suitable product. 

A notable level of supply, at the premium end is coming onto the market. This is expected to cause increased competition for residents at the premium end. New premium units entering the market are, to some extent, offset by older stock exiting the market, which means falling supply levels for more affordable retirement accommodation at the lower end.

The 2014 NZRVD highlights the remarkable opportunities for growth and expansion within the retirement village industry, with few signs of an oversupply and indicators of strong current and future demand.