Retirement Village Unit Shortage Looms As Supply Struggles To Keep Pace With Demand From New Zealand’s Ageing Population
New Zealand is facing a shortfall in retirement village accommodation that could place additional pressure on an already tight housing market, particularly in Auckland.
According to research published in JLL NZ’s 9th annual NZ Retirement Villages and Aged Care Whitepaper, there are currently 422 retirement villages operating in New Zealand, comprising just under 36,500 units. But while these figures reflect strong recent growth in the retirement village sector, JLL NZ Managing Director, Todd Lauchlan, says the statistics paint a picture of an industry struggling to keep up with demand from our ageing population.
“In the nine years that we’ve been publishing our retirement villages whitepaper, the number of retirement village units has risen 67% (around 14,500) to more than 36,000 units, accommodating an estimated 47,000 residents. This tells us that one in every seven New Zealand residents over the age of 75 is choosing the lifestyle offered by a retirement village.”
“If we project forward 12 years to 2033, based on this same level of demand, we see the need to accommodate a further 34,000 residents, which will require an additional 26,000 retirement village dwellings to be built.”
There are currently 211 villages in the development pipeline – 124 expansions of existing villages and 87 new developments – promising just under 21,500 new units. Approximately half of these are set to be contributed by the established ‘Big Six’ of Ryman, Metlifecare, Summerset, Oceania, Bupa, and Arvida. So how close are we to being able to meet demand?
“These pipeline figures are by no means guaranteed – dependent on a number of factors such as market conditions, site availability and resource consent approvals. With only 11,000 new units currently green-lighted for construction, we could still be facing a shortfall of 15,000 come 2033,” says Lauchlan.
Averting a shortfall is not just about delivering numbers, rather Lauchlan says operators need to ensure that supply matches geographical demand, as population areas and penetration rates vary around the country.
“Failing to match demand in Auckland will put further pressure on an already tight housing market, tying up stock and potentially encouraging further residential development sprawl to compensate. Retirement migration trends to rural and coastal areas will also see the disconnect increasing between demand and supply in the Waikato and Bay of Plenty.”
“It’s important that calls for a regulatory review of Retirement Villages do not delay the delivery of new units, as the benefit of a delivered pipeline will be felt beyond this sector of the housing continuum.”