The New Zealand retirement living sector is undergoing a dynamic transformation. At Expedite Projects, we focus on enhancing retirees’ quality of life while delivering cost savings for retirement village businesses across New Zealand. Staying current with industry advancements allows us to design superior living environments and make informed investment decisions for retirement living businesses in New Zealand.
In this article, we explore current trends, prospects, and investment opportunities in New Zealand’s retirement living sector.
New Zealand is experiencing a significant demographic shift, with its population ageing rapidly. Projections indicate that the percentage of adults over 65 will increase from around 18% in 2024 to nearly 25% of the total population by 2040. As more New Zealanders reach retirement age, the demand for retirement village units is surging nationwide.
New Zealand retirement villages are increasingly incorporating “future-proof” design elements to ensure longevity and independence for residents. This includes features like wider doorways, reinforced grab bars in bathrooms, and adaptable kitchens. These design elements allow residents to modify their living spaces as their needs change, minimising disruption and maximising control over their environment. Retirement villages need to attract residents away from their current homes. This means the village must offer all necessary amenities without compromising any features or comforts that the elderly are accustomed to in their current homes. To be truly appealing, the village should also offer enhancements or advantages that make it an even more attractive option than staying in their current homes.
With over 49,000 New Zealanders living in retirement communities—a number that continues to grow annually—wellness initiatives are becoming a focal point. According to the Retirement Villages Association of New Zealand, 87% of retirement communities now offer wellness programs. These programs include activities such as yoga, meditation, and exercise classes to enhance both mental and physical well-being. Additionally, retirement communities are investing more in on-site healthcare and wellness facilities to ensure residents have access to comprehensive health services and enjoy fulfilling lifestyles. A survey conducted in September 2021 revealed that only 2% of residents were dissatisfied with their retirement living experience.
Technological advancements have significantly transformed the retirement living sector, with smart home technology and the Internet of Things (IoT) leading the charge. This widespread adoption of technology allows residents to effortlessly manage various aspects of their environment, such as lighting and heating, through intelligent home systems. Additionally, telehealth services and remote monitoring technologies have become prevalent in retirement villages across New Zealand. By enabling virtual connections with healthcare providers, telehealth eliminates the need for travel and reduces wait times, thereby streamlining healthcare delivery. Looking ahead, the future appears even more promising with AI assistants providing companionship, reminders, and basic medical assistance. Smart sensors equipped with AI capabilities can monitor activity levels and detect falls, potentially alerting caregivers in emergencies. This seamless integration of technology empowers residents to maintain their independence and well-being.
Sustainability and eco-friendly practices are also gaining traction in New Zealand’s retirement living sector. The New Zealand Green Building Council (NZGBC) reported in 2023 that 82% of new building projects nationwide now aim for sustainability certification. This trend extends to retirement villages, where many are incorporating green building initiatives such as sustainable landscaping, renewable energy sources, energy-efficient designs, and seismic strengthening. These measures not only reduce environmental impact but also result in cost savings for both operators and residents. Seismic strengthening is especially important in retirement villages due to the vulnerability of elderly residents during earthquakes. Ensuring that buildings are structurally sound and capable of withstanding seismic events provides peace of mind and safety for residents and their families. Our association with the NZGBC is a testament to our commitment to environmental stewardship. At Expedite, our sustainability strategy of “Together to Zero and Better Together” outlines our collaborative approach to drive change and create a more sustainable future.
Community and social engagement play a crucial role in maintaining social connections among residents. Serious health risks can occur from social isolation and loneliness among older adults. In response, retirement villages now offer a variety of activities and programs designed to foster interaction and strengthen the sense of community. Initiatives such as hobby clubs and cultural events aim to keep residents active and connected, thereby enhancing their overall quality of life. Some retirement villages offer fitness sessions, book clubs, and events such as musical performances, art exhibitions, and gardening workshops.
New Zealand’s retirement living sector is currently flourishing, driven by demographic trends and rising demand. Statistics New Zealand estimates that the population aged 65 and over will reach nearly 1 million by 2030, creating significant demand for retirement living options. This demographic shift is prompting a surge in the development of retirement villages, with an increasing number of units being delivered annually to meet the growing needs. However, demand is outstripping the existing development pipeline, highlighting the urgency for more projects in this sector. The risk of insufficient availability of retirement units is becoming increasingly apparent, which could lead to longer waiting times, higher costs, and limited choices for prospective residents. Ensuring adequate supply is crucial to accommodate the ageing population and provide them with suitable living options that meet their needs and preferences.
The retirement living sector in New Zealand faces several key challenges. High development costs, driven by inflation and supply chain disruptions, continue to impact profitability and delay new projects. Staffing constraints in a tight labour market make it difficult to recruit and retain skilled personnel, especially for specialised care roles. Economic pressures, including fluctuating house prices and interest rates, affect both supply and demand while evolving regulatory requirements add complexity and cost.
One such opportunity lies in the growing ethnic diversity among residents. By offering tailored, culturally sensitive services, retirement living providers can better cater to the evolving needs of this demographic, strengthening their ability to deliver personalised, high-quality care. Also, integrating advanced technologies, such as smart home solutions and AI assistance, presents avenues to enhance care delivery and operational efficiency – a critical consideration given the sector's operational complexities.
Implementing sustainable practices in property development represents an opportunity to reduce costs while appealing to environmentally conscious residents and investors. This aligns with the sector's ongoing commitment to ethical, responsible and sustainable service provision.
New Zealand’s retirement living sector is facing significant economic challenges. Rising construction costs and fluctuating house prices are key factors impacting both supply and demand. Construction costs have been heavily influenced by inflation. The latest data shows a 2.4% annual increase in 2023, marking the slowest growth rate since 2016. This indicates some easing of pressure, but costs remain a concern for developers and asset owners. The median house price in New Zealand has seen a recovery, increasing by 2.28% since bottoming out in May 2023. However, this comes after a significant decline of 17.8% from their peak in November 2021. Additionally, the number of property sales has decreased significantly due to tighter lending standards and rising interest rates. These economic factors underscore the importance of strategic planning and efficient project management to navigate the current landscape.
Over the next decade, the retirement living sector in New Zealand is expected to maintain a stable growth trajectory. The balance between units and residents is projected to remain consistent, with a significant portion of the population entering retirement age. The sector may face challenges in maintaining this balance and adapting to slight shifts in demand. However, there are significant opportunities with the adoption of ESG certifications and compliance with Healthy Homes standards, ensuring future-proof and sustainable living environments. Expedite Projects is committed to delivering strong, resilient buildings that stand the test of time, ensuring that these living environments remain robust and sustainable for the next 50 years. By leveraging industry expertise and a single point of accountability, Expedite ensures that every project not only meets current standards but is also prepared for future demands, providing peace of mind and long-term value for asset owners.
New Zealand’s retirement villages are poised for growth, driven by an ageing population and increasing demand. Despite economic uncertainties, the sector remains resilient, supported by the ‘big six’ players who lead not only in the proportion of New Zealand’s units but in governance and sustainability efforts. Smaller providers also contribute by offering unique, locally tailored solutions. The industry’s commitment to ethical, responsible, and sustainable practices is evident in initiatives such as carbon reduction leadership. By embracing innovative and eco-friendly practices, the retirement living sector is well-positioned to enhance the quality of life for its residents, ensuring a bright and sustainable future.