Demand Surge Risks Putting Retirement Villages Beyond Reach

Executive Director John Jackson says the imbalance between rising demand and limited new supply is becoming more acute.

Senior Trust Retirement Village Income Generator (STIG) considers that demand for retirement villages, particularly at the luxury end, is outpacing supply.

The pipeline of new retirement villages is failing to keep pace with New Zealand’s ageing population says STIG, a provider of secured lending to New Zealand’s senior living and aged care sector (through financing of trusted operators, STIG supports the development of senior living communities throughout New Zealand).

Executive Director John Jackson says the imbalance between rising demand and limited new supply is becoming more acute.

“The number of New Zealanders aged 75 and over is about to surge,” Jackson says. “If we don’t accelerate the development of new villages, we risk a situation where some retirees are faced with fewer options.”

High construction costs, scarce land in desirable locations, and tight capital markets are all constraining new projects.

He says demand is not just a short-term blip because population forecasts show that the number of New Zealanders over 75 will almost double within 20 years, putting more pressure on an already limited stock of retirement options.

At the same time, residents’ expectations are shifting. Today’s retirees want high-amenity living, integrated health services, and the ability to age in place without sacrificing independence.

Without action, New Zealand risks a two-tiered market: premium villages for the wealthy and few viable options for everyone else. The solution lies in unlocking land, encouraging innovative financing models, and prioritising planning for senior housing as core infrastructure.

“This is not just a private sector problem,” Jackson says. “When a new village opens, it frees up hundreds of family homes for younger buyers and relieves pressure on health services by supporting wellness and care onsite. It’s a system-wide benefit.

“The question is not whether demand will grow because it will. The question is whether we move now to ensure retirement living remains accessible. Industry, investors, and policymakers need work together to expand supply before the shortage becomes critical.”