Demand rising for retirement village units

The 2020 edition of Retirement Village and Aged Care Data by Jones Lang Lasalle confirms the CFFC’s impression that demand for retirement village units is increasing.

The proportion of people aged 75+ living in retirement villages is now 13.9%, up from 9.5% in 2012. Some regions have higher village residency rates among that age group – in Auckland 18% of people aged 75+ live in retirement villages, in Bay of Plenty 19%, and in Gisborne 17%.

The data covers the year ending 2019 and is taken from 403 villages. Six companies run 42% of villages, with the number of units in those villages accounting for almost 60% of supply. The total number of residents is estimated at 45,000, the population of a city the size of Hastings. 66% of villages include an aged care facility providing about 50% of total aged care beds nationally.

The residency rate is expected to increase by 23,000 people by 2028, to total about 68,000. This would see demand for units increase by an extra 17,700 units, or around 2200 per year.

Auckland, Waikato and Canterbury capture 61% of new unit development. Summerset has the largest development pipeline followed by Ryman, then Arvida. In total, 29% of existing villages have an on-site development pipeline.

Separate from retirement villages, there are also 675 aged care facilities with more than 38,000 beds. Their distribution aligns with the 85+ population. For example, 26% of all New Zealanders aged 85+ live in Auckland, and the city contains 28% of aged care beds.

The CFFC monitors the effects of the Retirement Villages Act and its regulatory framework. Retirement Villages Lead Troy Churton said the government entity would continue to provide information for residents and intending residents, and liaise with the industry as it continues to grow.