In Auckland last week for the annual RVA NZ retirement village conference, they had 350 attendees for a country and industry one-fifth the size of ours (in village homes).
The audience was upbeat. Presentations by ANZ and PwC highlighted that they are enjoying 6% annual growth in new retirement village units since 2013, with 59 new villages and 6,500 new units hitting the market.
In the same five years we have had approximately 11,000 new units built and sold.
The percentage of NZ retirement village housing stock grew from 1.3% to 1.6% of the New Zealand market.
While they see the customer changing rapidly, 71% believe their current DMF levels are safe looking forward and the same number intends to retain all capital gain.
40% believe they will need to introduce a rental model option and 60% believe that over the next 5 to 10 years a new financial proposition will be required for ‘the new retiree’.
Another 30% believe that home care providers will create services that will ‘negate’ older people needing to move into a village.
The top four priorities over the next 12 months are:
- Developing or apartments and villas (45%)
- Developing a care proposition that can be delivered under the retirement village contract –their Occupation Right Agreement/ ORA – (43%)
- How to bring the community into the retirement village (40%)
- How to bring more care services into the village (35%)
81% believe technology and digital advancement are important/very important for their retirement village business.
On this subject we presented a paper on emerging technologies. Our proposition is that technologies outside the retirement village sector being adapted by today’s customers have the potential to make retirement villages irrelevant if the sector doesn’t establish its value proposition. Downsizing to apartments will be a serious option.
We gave the examples of the Australian technology company INS, who were exhibiting at the conference in Auckland having established a nurse call centre there in the last 12 months and winning village contracts, and the new sensor/mobile app product AbiBird, also now in NZ.
Australia’s Retirement Living Council Executive Director Ben Myers was also at the conference, joining Ryman’s Deb McClure in a presentation on the Australian market.
We have three NZ businesses targeting Australia now – Ryman with eight locations in Melbourne, Summerset, also acquiring locations in Melbourne, and RetireAustralia, now owned by NZ Super and private equity firm Infratil.
Other operators at the conference are looking to Australia as well.