New Zealand’s population is growing, and ageing at a rapid rate… Stats sourced from Stats NZ and the Better Later Life report from the Office for Seniors.
Retirement comes with many choices, but requires making some tough decisions. Forever Homes shines a light on the different lifestyle options, and the implications of each, including those outside the box.
When Maureen and Bruce Passmore first saw the spot in Stokes Valley where they planned to build their home, it was a damp, clay ditch on the side of a gorse-covered hill. It was 1974, and putting a house on that patch of land cost them $22,000.
Today, their place is still the last house at the top of the hill, commanding incredible views up the valley. It’s been extended twice and in place of gorse and clay are landscaped gardens, vege patches and patios.
Now in their “twilight years”, the couple have no plans to leave.
“We built the place,” says Bruce, who worked at Wellington’s docks before retiring. “I carted every stone up from the river for these walls. I’ve done masses of work here and now I’m enjoying it for the rest of my life.”
More than 710, 000 Kiwis are aged 65 years and older, according to the 2018 census.
The Passmores are among the majority who own their own homes or hold property in a family trust: about 67 per cent.
However, Maureen is in the minority of entitlement-age Polynesian-Kiwis who own their homes. Just 44 per cent in this age bracket are homeowners.
Home ownership is more common for Asian Kiwis at 47 per cent and Māori kaumātua, with 58.1 per cent of Aotearoa-NZ’s 48,252 tangata whenua over 65 owning their own homes.
But compare that to Pākehā in the same age group, more than 78 per cent of whom own their own homes, and the gulf between these groups seems stark.
Across the board one stat stands out: The numbers of older folks who own their home is decreasing, while the number that still have a mortgage at 65 is increasing.
That means for some, even owning their own homes won’t be the financial bedrock it might have been.
Now more than ever, older folks need to know their options.
It may be that some older Māori move out of home ownership to live with whānau.
Kaumātua play a large and important role in Māori life and on the marae, as the keepers of knowledge and tradition. Traditionally, elders will live with whānau, helping raise the grandchildren and being cared for.
”It used to be more common,” says Te Hamua Nikora, pou tikanga for Māori land management advisers Te Tumu Paeroa.
Modern Māori face a number of roadblocks to embracing the tradition of whānau care.
“Now you’ve got two parents who’ve got to go out to work, and we have to work right up to retirement age,” he says.
“Before, one adult would be at work while one was at home … We were then able to take care of our parents. Things are different now. But the ideal is still to be able to do that.”
FUTURE-PROOFING YOUR HOME
The Passmores have chosen to future-proof their home, so they can stay in it as long as possible.
For Bruce, that’s meant putting shallower steps up to his passion, the vege garden. His next big project is building a “little derrick-type thing” to hoist the groceries up to the balcony next to the kitchen, so the couple won’t have to carry them up the steep front steps.
Maureen is still working in TV as a freelance contractor. She has a gardener for the flower beds and sometimes calls on a cleaner to help with big jobs inside, such as the stove top and oven.
“If it gets too much for me, because I’m still working, I’ll hire someone to do it for me,” she says.
“Those kinds of things, they never used to throw me, but they throw me now. I just find it so much harder.”
OWNING YOUR OWN OPTIONS
For many, the benefits of staying in your own home – independence, security and a continued connection with the community – will outweigh ongoing maintenance, rising rates and changing neighbourhoods.
Financial pressure can force some folks out of private ownership before they’re ready. Releasing some equity in your home can help.
Subdividing your property: If you have space for a driveway alongside your home and enough room in your back yard for another home this can release a chunk of equity to live on.
On the downside, development will require significant initial outlay and a tonne of work. Also, friendly, considerate neighbours are never guaranteed, and a smaller section may impact your home’s worth.
Getting a relative or boarder: It pays to have some sort of formal agreement and ensure a relative you trust is also keeping an eye on things and has the power to help you if the arrangement goes sour.
You may also lose access to some rebates and entitlements if you have someone else in the home, so it’s not always a financial windfall. Do your research before taking in tenants.
Turn your home into flats: This is an option which seems to have fallen out of favour in recent years for a number of reasons.
The expense of the work, consents and other fees is prohibitive. Also, if you choose to rent, the property must meet rental standards and you’d be a landlord, with everything that entails.
Altering your home could also impact the value of the property considerably, which could make selling it to move into assisted living or a care home later difficult.
You can also sell and move into a smaller, cheaper home (see below); open your home as an Airbnb; rent your home out and move in with family; or take out a reverse mortgage.
For a more detailed assessment of your options around staying in your own home, visit mychoices.goodhomes.co.nz.
More than ever older Kiwis are “releasing the equity in their homes”, by moving into retirement villages, says Retirement Village Association chief John Collyns.
Today, there are about 40,000 older Kiwis in villages – 12.5 per cent of the over-75s – in either independent or assisted living villas or flats.
Villages are run in a variety of ways to meet a variety of needs and communities, but there are two general options: independent living and assisted living. Some homes will also include a care home, for those needing a higher level of care.
In most retirement villages, you are not buying the property, but a licence to occupy.
There are strict rules and legal protections around this, says Collyns, including covenants on the land which means they cannot be used for anything but retirement villages, and laws that protect residents from eviction if the company goes belly up.
While buying into a retirement village may be cheaper than buying a house freehold, it’s still an expensive choice.
A half-way step between private ownership and retirement villages could be downsizing into a small home in a company share– usually a flat in an apartment building – or body corporate – usually a small home in a purpose-built development, often with age covenants.
These properties come up infrequently because there’s often a waiting list. Covenants on the properties often come with an age limit – “over 55s only” for example.
Because of the nature of a company share or body corporate, it’s often difficult to get finance, and higher deposits are sometimes required from the bank. This would be less of an issue if you’ve sold your family home and have the cash ready.
While you will own your smaller property outright, you also pay an annual levy that means any maintenance of the building and grounds is taken care of.
The downside to that is that the time frame for work is decided on by the company or body corporate, not you, and big personalities at annual general meetings can mean your wishes are overlooked.
Life in a company-share has been described to me as “frustrating”, but having company nearby and a sense of security can balance that out.
Depending on the units you choose, most of the tenants will be in similar economic positions and stages of life, and you are also often able to vet newcomers based on the criteria set by the company.
PAPAKĀINGA and KAUMĀTUA HOUSING
Often built on a marae surrounding the wharenui, papakāinga describes a “nurturing place to return to”.
To be eligible for housing there, you will be able to whakapapa to that marae, and housing is usually open to anyone at any age that meets the criteria.
“It’s a beautiful concept,” says Nikora. “It’s very similar to how it was back in the day.”
Having kaumātua at the marae is a “link to our ancestors and to our wairua”.
“It’s also easy to look after them because they’re there. They whakapapa to that land, they understand what it means to live on whenua whakapapa.”
Often papakāinga is administered by iwi in conjunction with a community housing provider and the Ministry of Social Development. Anyone interested in applying will need to meet criteria set by them.
Wellington’s Te Aro Pā, for example, requires you to have Ngāti Ruanui and Taranaki Iwi ties. It’s administered by Dwell Housing Trust and the ministry via the public housing register.
Part of the Te Aro Pā plan was to make sure Ngāti Ruanui and Taranaki Iwi kaumātua could remain on their whenua with access to safe, warm, reasonably priced housing.
The decline in home ownership for older folks will likely mean a rise in private rentals, and with it less housing security for this at-risk group.
As anyone in rental accommodation will tell you, you are at the whim of a constantly fluctuating rental market, a tenancy agreement and the landlord. That’s all well and good when you’re in your 20s, but older renters may not cope well with the stress of leases not being renewed and being on the landlord’s time frame for maintenance and repairs.
Private rental is possibly the least desirable option for older folks for this reason. However, it does offer some freedom from maintenance worries, and flexibility if you choose to move into a different kind of housing later.
Goodhomes.co.nz has a detailed section on renting as an older person.
PUBLIC HOUSING and HOUSING NZ
Run by community housing providers, public private partnerships with the local council, and often administered by the MSD, public housing is specifically designed to meet the needs of older folks and help them stay in areas that they might be financially shut out of as they age.
You will often need to meet criteria set out by the MSD or the provider that may include an asset test, but often the rent will be well below market rates.
The greatest benefit of public and community housing for the over-65s is housing security and the possibility of staying in or near the community they have lived in their whole lives, despite rising rental and living costs.
Community housing providers Hamaru (shelter) Housing has partnered with Auckland Council to provide public housing for Auckland’s older community.
The provider has one of the largest stocks of senior housing stocks in the country, administering more than 1400 rental units for at-risk seniors.
Even so, across the country public housing stock is limited and waiting lists can be long.
Housing NZ also offers an option for older folks in housing crisis, though you’ll need to show you’ve done everything you can to find accommodation on your own.
While their stock is also limited and older, a spokesperson for HNZ says the agency has identified one and two-bedroom dwellings that are “future-proofed” – designed for older folks to live in – as “high need” and is building more and more of them.
While this isn’t a direct response to the growing number of older folks who face housing issues, it’s surely a factor in the focus on building these types of state-owned dwellings.