NZ set to run short of retirement village units, report warns
Monday, 1 December 2025
New Zealand will need an extra 60,256 retirement village units by 2033 to keep up with the ageing population, but there’s likely to be a big shortfall, according to a new report.
Commercial real estate firm JLL has released its latest study of the retirement village sector, and it warns that the gap between demand for units and the development pipeline is growing.
There were 43,598 units across 491 villages, housing about 56,677 residents in December 2024, the study found - all up on the previous year.
Demographic trends, which showed a rapid increase in the 75-plus age population, and an assumed ratio of 1.3 residents per unit indicated a need for 60,256 units by 2033 and 89,436 by 2048, it said.
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But based on the current development pipeline, there would be a shortage of 11,284 units by 2033, escalating to 23,241 units by 2048.
JLL New Zealand head of research Chris Dibble said the sector was seeing more expansion, which was positive, but the pace was below the longer-term average, and not sufficient to meet future requirements.
New unit completion below long term average
An estimated 1789 new units were completed in 2024, a figure below the five-year average of 2009 units per year, he said.
“The shortfall is not new, we know about it already but if we're not meeting the longer term averages then the situation gets exacerbated.
“Current market conditions are creating delivery challenges for operators. The industry is navigating headwinds from a challenging residential market where older people can’t sell their homes to move into a retirement village.”
That had a direct impact on retirement village demand and sales rates, and it also affected operators’ development plans, he said.
“It is a bit of a timing game from their perspective as well. One of the key things that we know is that there is a lot of land banking, and also exploration into different markets.
“Village penetration is growing in the typical Auckland, Wellington, Canterbury, and Bay of Plenty regions, but we are seeing more moves into other locations such as Taranaki.”
The reasons for that included accessibility of land, contour of land, pricing, demographic features, and potential residents’ desire to remain in their community.
Dibble said an interesting development was some structural changes in the sector, with an expansion in the village and unit share of smaller operators.
In New Zealand, the retirement village sector is dominated by the “big six” operators - Ryman Healthcare, Summerset, Oceania Healthcare, Arvida, Metlifecare and Bupa.
They accounted for 44% of all villages and 63% of total units in 2024, down from 46% and 67% the previous year.
Smaller operators are growing their market share
Meanwhile, the share of units owned by smaller operators, or by the non-big-six component of the market, had increased to 37% from 33%.
That change reflected an important diversification in meeting consumer needs as well as the tougher economic climate causing some of the bigger operators to scale back development, Dibble said.
“With the OCR now at 2.25%, stimulus from lower rates is starting to come through in business confidence surveys and retail spending, so the economy seems to be heading in the right direction.
“When that positivity transfers to the housing market more sales will occur, and more people will be able to get into retirement villages, the cycle will pick up, and more demand will start to be serviced by operators.”
It was likely to be a slow recovery, but the demographic challenges meant there was an opportunity for operators to scale up, either by expanding existing villages or developing new locations, he said.
But the subdued economic climate has left many operators treading cautiously.
Three of the big six - Ryman, Summerset and Oceania - are listed on the NZX. Of those, Ryman and Oceania released their first half results recently, and both reported sales or closures of homes.
Ryman has sold or is contracted to sell four sites or blocks of excess land from its land bank (two in New Zealand, and two in Australia) to release $110 million. It has also closed two aged care centres in Christchurch.
Oceania has sold seven rest homes around the country for $35m over the 2025 financial year and the first half of the 2026 year. It planned to sell another four homes for $40m, and they were under due diligence.
Oceania chief executive Suzanne Dvorak said there had been a noticeable pick-up in their unit sales but the trading environment remained tough.