Housing shortage creating lack of retirement accommodation
Friday, 2 July 2021
Doug Mitchell, a resident at the Village at the Park retirement village in Wellington, is aware of how difficult it can be for older New Zealanders to find accommodation.
“They have actually closed off the waiting list here. The current delays are up around two to three years for people applying for residents,” said Mitchell.
Some prospective residents have run out of time waiting for a spot and have to move into palliative care instead, said Mitchell.
New research shows that Mitchell’s observations are not unusual.
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Todd Lauchlan managing director of real estate firm JLL said future population predictions presented a potential for major supply issues in the retirement sector.
“We are forecasting a stronger demand than we have ever seen and the market is going to have to catch up,” said Lauchlan.
JLL data predicts that if current rates of demand continue, there will need to be 26,000 more retirement village units built than are currently predicted to be built by 2033.
Before demand is met, older New Zealanders could face longer wait times and higher prices for a spot in retirement villages, said Lauchlan.
But Retirement Commissioner Jane Wrightson questions whether more retirement village housing is the best answer to an ageing population.
“This is a much bigger issue than just supply of retirement village units,” said Wrightson.
“Unless the retirement village industry develops new models, the number of people who cannot afford to buy a spot in a retirement village will increase.”
In June, the Retirement Commission called for an urgent Government review of the retirement village industry, saying the balance of power was unfairly weighted towards the village operators.
A lack of supply would increase the gap between the haves and the have-nots in New Zealand's older population, said Wrightson.
“A retirement village is just not an option for people who do not have a large capital sum to invest, which is why we need to look at different models for seniors’ housing.”
This could create a senior citizen housing crisis similar to that currently experienced by first-home buyers, she said.
Roy Reid, housing spokesperson for Grey Power said retirement village prices were already growing to an unreasonable level in some regions.
“The new builds have pushed up the prices for an occupational rights' agreement. Whereas before a standard price was $300,000, we are now seeing $800,000 plus for an agreement,” said Reid.
Most retirement village units are sold under an occupational rights agreement, in which a resident purchases the rights to occupy a unit, but in most cases does not own the unit itself.
Older New Zealanders in the regions have found the prices of occupational rights' agreement at the newly built villagers unaffordable even after selling their home, said Reid.
But John Collyns, executive director of the Retirement Villages Association, said there was no need to change the villages current operating procedure.
“The model works. The reason is older people like the financial certainty that villages offer.”
“Residents are moving into the villages at a rate of almost a hundred people every week. That is a colossal endorsement of what we do,” said Collyns.