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News Release

Auckland

NZ’s rapidly aging population is fuelling demand for retirement villages


 

 

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​​NZRVD image.jpgGrowth of New Zealand’s resident numbers within the 75+ year’s age bracket will fuel future demand for retirement village accommodation and encourage continued robust development within the industry according to JLL’s annual retirement village NZ​ database (NZRVD) whitepaper.

Statistics New Zealand (SNZ) states in 2013 people aged 75 and over represented 6% of the total population. This proportion is projected to rise and by 2043 the 75+ age bracket will represent 14% of the total population. The growth in this age group leads to a corresponding demand for not only appropriate housing, but for security, socialisation and health related support services, all of which is provided for by the retirement village industry.

Economist and Research Consultant Angela Webster, and author of the whitepaper says, “There are a number of drivers responsible for the increase in demand for retirement village living. Aging population is a key factor, along with growing popularity of retirement village living, and increased product availability. Other influences include a strong housing market, retirement village affordability in relation to the residential housing market, and a decline in the range of alternative retirement accommodation options.”

JLL’s report states that this aging population will create an additional demand from 55,336 residents and 42,566 units, which equates to 284 villages with the average unit count of 150. This equates to 1,703 units and 11.4 villages per annum from 2018 to 2043.

Webster adds, “If penetration rates increase as is predicted, this has the potential to substantially uplift demand levels in the industry.”

The new development pipeline is notably stronger as at October 2015 with 65 new villages, compared to 51 as at October 2014, and 36 new villages recorded in October 2013 of the NZRVD.

When placed in a regional context the Auckland region captures approximately 49 percent of the development pipeline recorded as at the end of 2015, with 7,940 units, followed by 13 percent and 2,150 units in Canterbury, and eight percent and 1,355 units in the Bay of Plenty. These three regions captured approximately 70 percent of New Zealand’s retirement village unit development pipeline.

9,357 units within the development pipeline are accounted for by the five largest village operators (Ryman, Summerset, Metlifecare, Bupa and Oceania) and 6,766 (72 percent) are located within the “golden triangle” of Auckland, Hamilton and Tauranga. Many of the major operators have openly been targeting this area for land banking and village development. 

Webster says, “A large fully developed modern retirement village is an extended project, averaging six to eight years if the resource consent and time frame goes according to plan. This provides a development time frame which helps us estimate how the supply generated by the development pipeline will be disseminated over the coming years.”

Webster continues, “For example if we divide the “new villages” development pipeline, at the top five operators, by seven years and 150 units per village, we get six new villages per annum being provided to the market by these operators.”

The positive influence the retirement village industry has on the residential housing market and government expenditure is increasing the acceptance of the retirement village model with limited signs of an oversupply and indicators of strong current and future demand.

Click here to download a copy of the retirement village database (NZRVD) whitepaper​.​​