John Collyns on taking the heat out of the housing crisis
Liam Butler interviews John Collyns, RVA Executive Director on taking the heat out of the housing crisis.
26 August 2014
Question One: How do you think retirement village living could help take the heat out of the housing crisis?
John Collyns, Retirement Villages Association Executive Director:
Thousands of new homes need to be built each year to meet the growing number of families throughout New Zealand desperate for a roof over their heads. The Government's Housing Accords will hopefully go some way to boosting the delivery of housing across the city by paving the way for consenting 39,000 new homes and sections over a three year period. However, what's abundantly clear is that it is going to be extremely difficult to meet that demand just through new housing stock and intensification, particularly for homes suitable for families. The growth and development of retirement villages can provide part of the answer to this problem, but it does require some lateral thinking.
Traditionally, New Zealanders have viewed their equity in their family home as a large part of their retirement plan.
Many older people quite rightly place a huge personal value on their homes. The house forms a significant part of their history, they brought their children up there, they know the neighbourhood and their neighbours. In some cases, they may even feel that there is an expectation that they should continue living in the family home so grandchildren can experience what their parents did.
However, the reality is for many their wealth is tied up in their house and can't be used to cover living costs and so a growing number of New Zealanders from all walks of life are choosing to sell the home and release their equity.
A range of alternative housing options are available, including downsizing to a smaller house, townhouse, an apartment or an owner-title unit.
Many though are joining the 30,000 or so older New Zealanders who choose live in one of the country's 24,000 retirement village units.
Let's consider a 75-year-old Auckland woman in a five-bedroom house. She's had enough of worrying about the lawns, the gardening, her leaking roof, and her latest insurance bill. She wants an easier life, so she puts her house on the market.
It fetches, say, $800,000. She pays $500,000 for a licence to occupy in a retirement village that's caught her eye and puts the rest in the bank.
At the retirement village, she is still living independently, but help is right at hand. She's surrounded by people her own age with similar interests.
On any given day she could be singing in a choir, playing bridge, golf or croquet, reading in the library, going to the cinema, learning to meditate or write poetry. Very likely she's still close to her community.
She can still attend her church, Probus or golf club, and have afternoon tea with her friends. She still has money to spend on her grandkids and fund her annual overseas trip.
She knows she benefits from enhanced security and she will be missed quickly should anything happen to her. She doesn't need to worry about a thing.
In some villages, a resident will also know she can take advantage of aged-care support services. This is a factor many of us value too late - if you're living at home and suddenly need aged care, chances are you will have to make do with whatever facility has a bed for you, wherever that might be.
The life in the village, the community facilities and amenities our resident enjoys now are paid for later by a 20-30% deferred management fee when she terminates the occupation right agreement.
By making the choice to move to a retirement village, she's benefited from companionship, independence and a sense of community. However, her decision has had wider-reaching benefits, including freeing-up a much needed good suburban family home for a young family.
Across all of NZ, around 10.5% of people aged 75-plus live in a retirement village. That figure's up from 9.5% a year earlier. Even allowing for renters, those in care or living with family, a large percentage of older Kiwis continue to live in their own homes.
There are tens of thousands of homes out there that could be released onto the city's housing market and their owners liberated from the worries of home-ownership.
An increasing number of New Zealanders now know that retirement villages are not "old people's homes" or rest-homes - quite the opposite in fact. They offer resort-like, independent or supported living, usually in prime locations, for older New Zealanders.
However, the growth in the number of us opting for retirement village living in itself presents a challenge to retirement village developers to keep up with demand. It can take up to eight years for a village project to come to fruition.
At a 12% penetration rate, projections to 2034 are for the number of people in retirement villages to grow by around 2,000 people annually for 20 years, which means (using an average village occupancy of 200 people) 10 villages need to be built each year to keep pace. Eight villages were built between 2012 and 2013, with some villages expanding, adding 2,333 units. Our sector finds itself in a middle of a strong growth environment and it is a particularly exciting and challenging time.
Grappling with supply, demand and delivery is something the sector is working on constantly . We believe retirement villages will play an increasingly important role in the future of Auckland by offering older residents companionship, a community and independent living.
But retirement villages are also giving more New Zealand families the chance to take their first step onto the property ladder and mark up their own histories in houses they are proud to call home.
For more Articles like this go to ELDERNET GAZETTE