"Food for Thought"

It’s a big decision to move into a retirement village when you are fit and healthy. However, according to Economist Tony Alexander’s most recent survey (January 2021), some homeowners are bringing their retirement plans forward, selling their property, and investing in a ‘right to occupy’ villa in a retirement village. It would appear that there is demand for the Lifestyle Retirement Villages, often situated close to a beach or proximate to a golf course, and are attracting retirees from 55 years plus.

Now, I’m no expert on retirement villages, or a lawyer, but I’m experiencing many of my clients selling up at high market value (34% growth in the Hawkes Bay market between December 2019 and December 2020) and moving into a 2.5-3 bedroom property in a retirement village that for some are priced below current market inflation.

How long these retirement villages will hold their prices below market inflation is anyone’s guess!

According to Tony Alexander’s recent survey, the inability to source building supplies means supplies are increasing in price. This will inevitably culminate in an increase in the cost of retirement villas across the country.

When an increase will happen is anyone’s guess? However, it appears that right now the differential between selling your property at market value and investing in a ‘right to occupy’ might just be an attractive proposition for some.

Retirement villages come in many forms and have weekly monetary overheads, so it’s imperative you do your due diligence and consult with your lawyer. They are certainly not for everyone, but right now some of the Lifestyle Retirement Villas certainly look like an option.

Disclaimer - This is a opinion piece written by Linda, and is not the opinion of Ray White.

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