The Government’s proposed changes to the Retirement Villages Act will give residents greater certainty over when they get their money back and stop paying weekly fees, a move Village Guide Founder Paula Bishop says many residents and families will welcome.

At the same time, Bishop is concerned that the new compulsory buyback and interest rules are likely to slow future village development and supply and put upward pressure on prices for new residents.

Under the reforms, operators will be required to stop charging weekly fees as soon as a resident vacates, pay interest if a unit has not been relicensed after six months, and repay the outgoing resident’s capital no later than 12 months after the unit is vacated. The package also includes a new independent disputes scheme and clearer legal documents to help residents better understand their rights.

“Putting a clear outer limit on capital repayments and stopping weekly fees on exit will make the financial side of village living more predictable for future residents,” Bishop says. “These measures respond directly to long standing concerns about people waiting lengthy periods for their money.”

“While these changes improve certainty for residents, they are not cost free.”

“The financial impact on villages of combining interest from six months with a mandatory 12-month buyback should not be underestimated. It will place significant new financial obligations on operators and mean they will need to carry larger capital reserves or borrow more. Those additional costs will ultimately flow through to pricing and development decisions.”

“This could make it more challenging to deliver the future supply of retirement village units New Zealand urgently needs. We already know demand for retirement units is outpacing supply, with an expected 11,000-unit shortfall by 2033 and a slowdown of consenting activity over the last year.”

Bishop says any slowdown in retirement village development will have wider consequences for aged care because most new villages are typically built on a continuum of care model that combines independent units with higher level care on the same site. Around two thirds of New Zealand retirement villages include an aged care facility, and roughly half of all aged residential care beds are located on retirement village sites.

“Retirement villages are not just lifestyle communities; they are a core part of New Zealand’s aged care model,” Bishop says. “If development becomes harder or more expensive, the ripple effects will be felt in care bed capacity and in the wider health system.”

Village Guide helps New Zealanders and their families find, compare, and understand retirement village options. Bishop says the platform will update its guidance and resources as the legislation progresses so residents and families can plan ahead with a clear view of how the new legislation is expected to work.

About Village Guide:

Village Guide is an independently owned online platform providing comprehensive information on every retirement village in New Zealand, and bringing together nationwide village listings, comparison tools and practical guidance.

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