Mega-retirement villages thrive, small providers struggling

There are fears that recent pay equity settlement could force smaller facilities like Lower Hutt's Wesleyhaven to close.
MATTHEW TSO/STUFF

There are fears that recent pay equity settlement could force smaller facilities like Lower Hutt's Wesleyhaven to close.

Retiree Les Everson leads a busy life.

Stuff first caught him on his way out the door - off for a trip around Wellington's Island Bay.

That's the retiree's life these days, full of activities as a resident of the Bob Scott Retirement Village in Petone, Lower Hutt.

Everson is one of New Zealand's 711,200 people aged over 65. He's part of one of our fastest-growing demographics and is one of the tens of thousands of Kiwis living in aged residential care.

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"It's great. The other people in our building, we say 'how's your apartment?' and they say 'it's great' too."

Petone's Bob Scott Retirement Village is taking off at the same time small Lower Hutt resthomes were forced to close. ...

Petone's Bob Scott Retirement Village is taking off at the same time small Lower Hutt resthomes were forced to close. Why did one village thrive while others struggled? (File photo)

Developed on a site once full of abandoned school buildings, the Ryman Bob Scott Retirement Village has been welcomed with open arms by Petone, a Ryman spokesman said.

"The site was formerly the old Petone College, but it had been empty for a number of years," Ryman corporate affairs manager Dave King said. 

Named for All Black legend Bob Scott, ground broke on construction in May 2014, setting off a massive $120 million development.

By 2015, the first residents were moving in. Everson was one of them.

He knew the village's namesake too, having played rugby with the All Black great for Petone back in the day.

Since 2015, Everson has seen the village fill up and now he and his wife Marie are two of 300 residents.

Alex Telea (right) launch a fitness programme at the Bob Scott Retirement Village with Les Everson.

Alex Telea (right) launch a fitness programme at the Bob Scott Retirement Village with Les Everson.

However, while Petone's biggest retirement village is booming, just across the valley, Wesleyhaven Retirement Village will be closing its doors for the last time on Friday. Its 59 remaining residents have spent the last couple of months scrambling to find new homes after the decision to close was made in June.

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At the time, the Wesleyhaven closure was due to an untenable financial situation. At the peak of its trouble, it was running at a loss of $25,000 a month.

The closure also means 79 workers will lose their jobs.

NZ Aged Care Association chief executive Simon Wallace is concerned about the effect the recent pay equity settlement ...
Supplied

NZ Aged Care Association chief executive Simon Wallace is concerned about the effect the recent pay equity settlement could have on small, rural resthomes and retirement villages.

At the end of 2016, Petone's Britannia House was also forced to shut due to a lack of income and falling occupancy.

Residents were outraged, but efforts to save the rest home, including raising nearly $30,000, did not work out.

NZ Aged Care Association chief executive Simon Wallace is worried this could be the start of a new trend.

 

It's still too early too tell, but the recent pay equity settlement could force smaller facilities like Weslyhaven to close, he said.

From July this year, workers in aged residential care received a pay jump from around $16 an hour to between $19 and $23.50.

"It is too early to tell how acutely the recent pay equity settlement will affect the sustainability of rest homes. We have seen closures in Lower Hutt [Wesleyhaven Village] and Hamilton [Alphacare] and more may follow. If that transpires, it will impact on bed availability, probably in more rural areas of the country," he said.

Centurion and mad Phoenix fan Eileen Smeaton got a surprise visit from several members of the Phoenix Football team at ...
KEVIN STENT/STUFF

Centurion and mad Phoenix fan Eileen Smeaton got a surprise visit from several members of the Phoenix Football team at her birthday celebrations in Wesleyhaven Village,Naenae. Wesleyhaven was one of the villages forced to close in recent months.

However, Wallace said there was no bed shortage - yet.

"There's an occupancy rate of 86 to 87 per cent but that is expected to change quite remarkably over the next few years," he said.

The latest data from NZ Aged Care Association showed there are 672 aged care facilities around New Zealand. Combined, they have 38,805 beds available.

Across those rest homes and retirement villages, there are 33,379 residents.

Like many first world countries, improvements in our healthcare and lifestyle mean we're living better and longer. But this also means our retired population is ballooning.

An industry insight report on healthcare and social services from Westpac, released in October 2016, estimated over the next 25 years, the over-65 demographic will double in size to 1.29 million.

Wallace said that under a scenario driven by the population of older people alone and with no additions to supply,  full capacity would be reached around 2019.  

But while smaller, more rural facilities may find themselves in danger, larger villages like the Bob Scott Retirement Village, are finding the opposite.

King has been with the Bob Scott site since the beginning and has watched it grow.

"The village has been filling up steadily and we've been really pleased with demand," he said. "There are more than 300 residents already, and we have two stages under construction at present and another one to build."

By the time building is finished, the village will be home to more than 450 residents.

King estimated construction was "about 70 per cent of the way through" and at its peak, there were 350 workers on site.

So why are large scale retirement villages taking off while smaller ones close down?

The Westpac report found private companies such as Ryman are expected to provide "around 40 per cent of the rest home beds needed over the next 10 years".

These beds are "almost always" part of a larger village like Bob Scott. These facilities find it easier to make money. As the report puts it, they have the "scale and alternative revenue streams to remain profitable".

People who can, will pay extra for services such as larger rooms or physiotherapy options. Bigger villages will also often draw up what's called "occupation rights agreements".

When residents move in, they agree that 25-30 per cent of their fee will go directly to the facility when they leave. With the average rest home stay hovering around two years, villages and homes can expect regular income from these agreements.

The success of these bigger facilities is little comfort to the residents of Wesleyhaven however. Or Alphacare in Hamilton.

"They have been a real stalwart of the community. We don't want to see any more close down," Wallace said.

 - Stuff

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