The thriving senior living sector is New Zealand’s largest supplier of new dwellings and contributes significantly to easing the shortage of new housing. Unlike other industries, stability in the senior living investment sector, has proven to be unaffected by the same factors driving down residential values and commercial property demand.
A growing need to build and provide more senior living communities, presents unique investment opportunities.
We’re seeing a ‘perfect storm’ of wider economic and societal trends, all converging to make lending to the senior living sector attractive for investors.
Seniors are increasingly cashing up the freehold family home and choosing to spend their golden years in safe, sociable environments with other like-minded residents. Seniors aged 75+ opting to live in villages has almost doubled up from 8% to 14% since 2008.
This trend extends beyond the boundaries of our main city centres - where larger players are competing - into smaller rural and coastal towns that offer an enhanced lifestyle.
Number of new senior living units needed by 2031 to house New Zealand’s ageing population*.
*JLL Retirement Village Market Forecast as reported by The Post, 23rd August 2023
New Zealand’s population is ageing as people live longer and have fewer children. As a country we need to plan and build to be ready for the resulting changes in the next 20-40 years, and this means investing in living spaces beyond just the main city centres.
According to Statistics New Zealand, the baby boomer demographic is forecast to increase. A large proportion of the population is, and will be, retiring with an increased life expectancy. Further population growth in the 65+ demographic drives increased development activity. And unlike other industries, stability in the senior living investment sector has proven to be unaffected by the pandemic.
Lending to the thriving senior living sector secured by bricks and mortar assets, is a unique property investment proposition, with a stable long-term outlook and a proven track record of generating attractive investor income.
The senior living sector is orderly, well regulated and provides a quality lifestyle for retirees. Driven by demographic demand, the opportunities are set to grow.