There are hundreds of areas where Kiwis suspect they outshine their Australian counterparts, but the one probably least likely to come to mind is aged care.
Yet that's what the New Zealand Aged Care Association reports, as an increasing number of Australian retirement firms ask the industry body to arrange tours of Kiwi retirement villages.
The draw, says chief executive Martin Taylor, is our mixed care model, which incorporates residential and hospital facilities on the same property.
The model is used by listed retirement firms Ryman Healthcare, Summerset and Metlifecare among others, and lets providers deliver medical support to retirees in their homes.
As well, the villages can sell premium services to retirees, a profitable revenue stream.
That contrasts with Australia where a more prescriptive regulatory regime restricts where firms can build retirement care facilities, what services are allowed there, and who can occupy them.
"The New Zealand model developed where people said I've got a unit in a village and I am really happy, so why can't I have rest home care delivered here? Why should I shift 50 metres for those services?" Taylor said.
Wellington-based operator Summerset said it regularly gets tour requests from foreign investors, mostly from Australia, but also as far afield as China and the United Kingdom.
A spokesperson for the firm said there is high interest across the sector.
Cam Ansell, national head of aged care at Grant Thornton in Australia, said Australian investors expect regulation to start easing in the next five to 10 years.
The Australian government will realise "the next generation of consumers won't be told what they can and can't do with their money," Ansell said.
He said the New Zealand approach was among the best in the world, which was why it was attracting international interest, but changes could improve it further.
Under the present New Zealand model, consumers buy occupation rights to a room, bed or villa in a retirement village for the rest of their lives. Once they die or give up the rights, it is resold to a new customer.
This is a highly profitable capital gain for retirement village operators, as all the development costs are typically covered by the first sale, although the fair value of the asset is decreased because of age and wear and tear.
In New Zealand, occupation rights typically decrease in value by a set proportion every year, say 5 per cent, so that a retiree leaving the village after 10 years would receive about half of the value back.
In Australia, consumers can make a capital contribution to their accommodation above and beyond the occupation right.
That means when it is resold they, or their family, receive the value of the occupation rights (if any remains), plus a capital return proportionate to how much they put in. The advantage for retirement firms is that they don't have to wait for a decade or more before they see a return on their capital.
- © Fairfax NZ News
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