Why Tauranga's retirement villages are booming

Ian and Sheila Travers love living at Bethlehem Country Club retirement village. Photo/John Borren

Tauranga's booming retirement village market has sparked a push to educate retirees and their families on the costs and benefits associated with village life.

Sixteen per cent of Tauranga's over 75s live in retirement villages - the largest percentage in the country - with numbers expected to double nationally over the next 30 years.

Retirement Village Association figures show there are 26 retirement villages across Tauranga City and the Western Bay, comprised of about 2400 units and 3100 residents.

Read why village living is such a hit with Ian and Sheila Travers' story below

Across the Bay of Plenty 15 retirement villages are expanding and two are under construction.

At the majority of villages residents purchase a Licence to Occupy one of the houses or units. When they leave the village a deferred management fee of 20 to 30 per cent is deducted from the value of this licence. In most cases any capital gains on the property also belong to the village, rather than the resident, or their estate.

Residents also pay a weekly fee to cover things like rates, insurance, emergency assistance, cleaning and grounds maintenance. In some villages this fee will be fixed for life.

Commission for Financial Capability spokesman David Boyle said retirement villages varied in their accommodation, support, management, legal and financial structures.

"Villages vary from not-for-profit to commercial villages, from small to large, and from those with limited service through to some with full hospital care and even dementia care," he said.

Potential residents needed to consider the design of the village, the facilities and services available and the ability to move within the village.

"Things that don't seem important now might become significant as people get older or if they become less mobile."

Residents are required, under the Retirement Villages Act 2003, to get independent legal advice before signing an Occupation Right Agreement.

Tauranga lawyer Philip Annan, who owns Annan Law, specialises in assisting people making the move to a retirement village.

About half [of all residents] only have the national super to live on.

"People should certainly consult with their family because it's a big decision, and obviously look at lots of different villages," he said.

Mr Annan said the documentation for moving to a village was "mind-boggling" and it was best for people to consult their lawyer before becoming burdened with it.

It could take up to an hour to go through the documentation with a client who then had to sign a certificate to say they understood it clearly.

It was important for potential residents to understand they could lose up to 30 per cent of their capital and were unlikely to receive the capital gains on the property once they left.

"You've got to explain these things softly to people," he said.

At the same time they are entering a village, Mr Annan recommended clients review their power of attorney, will and write a living will regarding their treatment if they became ill.

Mr Annan, whose parents live in a local retirement village, said it was a nice environment offering companionship among like-minded people.

"There's no AC/DC coming from the neighbours, more likely Beethoven, which is really comforting for elderly people."

Executive director of the Retirement Village Association, which represents 95 per cent of the country's villages, John Collyns said it was common for people to retire to Tauranga at 65.

Ten to 12 years later they began considering what to do next and saw a retirement village as offering "a clear pathway to care", should they need it.

Village life offered the chance to release some of the equity in their home, make new friendships and shake the responsibilities of home ownership, he said.

About 65 per cent of the country's villages have care facilities onsite with the remaining 35 per cent lifestyle villages.

Some villages appreciated that residents may not have a lot of money, others offered an eight-star resort approach, he said.

"About half [of all residents] only have the national super to live on," he said.

Ian and Sheila Travers love living at Bethlehem Country Club retirement village. Photo/John Borren

The Commission for Financial Capability is running a series of free seminars to offer tips and advice to retirees and their families considering retirement villages.

The next seminar will be held on Thursday, September 3, at Tauranga RSA, Cameron Rd, from 1pm to 2.30pm. Registration is essential.

Costs of Retirement Village Living

Outgoing costs: Weekly fee - the national average is $120, and it usually covers:
-Upkeep of facilities and common areas
- Maintenance of grounds
- Staff salaries
- Statutory charges, rates, water
- Security and insurance
- General services (eg, village van)

Possible costs when leaving:
- Fixed deduction or deferred management fee (covers maintenance and refurbishment of the village).
- Removal of any alterations made
- Marketing and selling costs
- Weekly fees may continue
- Refurbishment

- Commission for Financial Capability

Village living the right move

Ian and Sheila Travers retired on a Friday and moved in at Bethlehem Country Club the following Monday.

Ian was the principal of Te Huruhi Primary School on Waiheke Island - a position he held for 25 years - and Sheila a teacher at the school.

They sold their large island home, with a 2000sq m section and great view, to the first person who looked at it, packed up and moved to Tauranga.

"It was just the next adventure really and we saw it as that," Mr Travers said.

I'm fitter now than I have been for years.

Ian Travers

At 240sq m with high studs, their new home is about the same size as their previous one but in the village they have a feeling of safety and security, while being surrounded by like-minded people.

Choosing a village was almost like deciding which school to send your child to, he said.
"It's a matter of doing good research, finding the right village and being careful about the purpose you are moving into a village for," he said.

The couple, in their late 60s, decided that after a year in their new home, they would sit down and write a list of the pros and cons of retirement village living.

They went to a cafe and did just that but they couldn't find anything to write in the cons list.

"It's a great lifestyle, it's just superb really," Mr Travers said.

Losing part of the equity of his home was a trade-off the couple were prepared to make.

"It's purely an investment in my life and my lifestyle."

By moving into the village at a young age they were also getting the best value for money, Mr Travers said.

"It fascinates me the number of accountants who are in the village."

Since moving to the village in April 2013 they have spent seven months travelling the world and love being close to their daughter, her husband, and their two grandsons who live in Papamoa.

They never have to mow the lawns or do much cleaning and have busy schedules, including darts, dancing, swimming, table tennis and editing the village newspaper.
Mr Travers also goes to a gym in the city three times a week.

"I'm fitter now than I have been for years," he said.