Retirement Village Sector Meeting Long Term Demand
Fuelled by an ageing population and changing tastes in retirement living, the retirement village industry is booming, and as a result, presenting investors in New Zealand with some very solid investment opportunities.
John Jackson (Executive Director of Senior Trust Capital Limited) says the retirement sector has strong growth predictions due to the rapidly growing 75+ population and an increasing acceptance of this style of living by senior New Zealanders. The industry is expanding to meet the demand created by a surge of New Zealanders reaching the 70+ cohort.
Auckland has 25% of the 75 plus aged population, which is expected to increase by 204% up until 2043. Demand is expected at 1,654 units per year until 2043 and growth has stood at 29% over the last five years.
44% of the new unit development pipeline is in Auckland, 13.6% in Christchurch, 8.5% in the Bay of Plenty and 9.4% in the Waikato.”
Jackson says it is evident that the Retirement Village Industry is beginning to ready itself for another level of growth over the coming decade by land banking, drive new development and push the level of quality higher in the face of increased expectations from the market.
“People over 65 no longer want to live in old style rest homes, so those older facilities are becoming obsolete at the same time as new stock build rates are only just meeting demand.
“This creates a perfect storm as the retirement village industry tries to chase those demographics down,” Jackson says.
New Zealand has an internationally recognised retirement village model and is viewed as one of the best with Australia, and Britain especially taking note.
The regulation and occupation licence structure offers consumers transparency and protection along with a compelling package of services. The model is now well accepted as residents can see the benefits and value of what they are paying for by offering them financial, physical and emotional security in their retirement.
“In moving from the old institutionalised model the industry has now created a strong platform for future growth, established a trusted and highly regarded offering to residents and investors that is backed up by very strong demographics and under pinned by property,” Jackson says.
John Jackson on industry growth
“We are very comfortable with our investments in Senior Trust. We like the return and the security of the retirement village industry. Through the ups and downs of the investment markets the Senior Trust team has been open and honest and we trust them"
Bill and Lorna, Auckland