Where are the best spots to buy for retirement?
Retirement looks different for everyone – it’s not just a case of hanging up the lanyard and reaching for the Gold Card. Many will work well past the age of 65, some part-time, and some will stop earlier. Some will travel, some will garden, while others will stay put and read all the books they ever wanted.
A common occurrence in most people’s move into retirement, though, is moving house, which can often also mean moving towns.
It’s a long-held assumption that retirees won’t need a house as big as the one in which they raised a family, or near work anymore. So, they sell up and buy a smaller home in a cheaper area, thereby freeing up capital to invest and use the returns to top up the pension. But, that’s not the only thing.
So, when looking to buy your next home for retirement what are the seven key things to consider?
1. Your retirement stage
Looking at retirement means changes for everyone. The first real steps for retirement really comes into consideration for many in the 55-64 age group. Many will be looking at how to release capital and start to enjoy the fruits of their labour. Take advantage of what’s on offer either locally or internationally. This can require a step change in housing requirements for many who have found themselves asset rich, but perhaps a tad cash poor.
From there, the Commission for Financial Capability (formerly the Retirement Commission) identifies three different stages once in retirement, and each one also affects the decision of where to live and how.
• The Discovery (active retiree) stage (65 – 74) when travelling, seeing family, and spending more time on hobbies and interests is appealing. Your ideal home during this time might be a lock-up-and-leave townhouse that’s still close to larger centres and family.
• The Endeavour stage (75-84), when the focus is on the simple things in life, staying closer to home. An ideal place at this stage might still be the townhouse, but perhaps a unit with a courtyard garden, or an apartment. By this stage, releasing the equity tied up in the family home sometimes becomes a necessity as you may find yourself asset rich but cash poor.
• The Reflection stage (85-plus). Your health and finances may limit your choices, and this may be the stage when you consider moving to a retirement home.
When considering your life stage and what and where to purchase, you’re not alone and competition is high. These four age groups represent approximately a third of all traffic to the Bayleys website.
2. Access to family and friends
Most retirees would like to live close to family and friends in the first instance, and many when looking to purchase a smaller, more affordable home will continue to stay local, often purchasing within the area. The key consideration here, is the community that the owner knows and has come to appreciate so much is still a fondly held memory and hard to leave.
Some retirees also see it as an opportunity to move close to their adult kids, but this can be challenging if the kids have a different idea or relocate away because of jobs or changing circumstances.
3. Lifestyle, hobbies and interests
Understanding what you want to do when you’re kicking back and relaxing in retirement will shape the way you search for your new property. Those interested in taking a hike or a stroll should consider where their favourite national parks or recreational reserves are located. Those keen on fishing and ‘landing the big one’ should consider living in proximity to lakes, rivers or the ocean. Or for those looking for other social activities, should consider the local community and sports clubs. Or maybe it’s a bit of all of these things?
4. A good safe and like-minded community
Keeping safe and knowing that your new neighbourhood and new home remains safe and secure can often assist when making a major purchasing decision. Police New Zealand provide interactive stats on a regular basis about the types of crime events and the frequency across New Zealand at http://www.police.govt.nz/about-us/statistics-and-publications/data-and-statistics/demand-and-activity.
A quick way to also identify safe an like-minded communities is to assess the age of the population. Areas that showed older populations in the 2013 Census were Bay of Plenty, Marlborough, Horowhenua, Waimakariri, Napier and Kapiti. That’s unlikely to have changed significantly during the past five years and the 2018 Census will provide and update on the country’s demographics.
5. Good weather and climate
Four seasons in one day is a popular song by Crowded House, but it can ‘dampen’ the mood and the activity list when looking to make the most of retirement.
According to Niwa statistics, the sunniest three areas in 2017 were Nelson, Marlborough and Hawkes Bay. Kaitaia, Whangarei, Napier, Gisborne and Nelson often have the highest average maximum temperatures. But if perhaps you’re just looking for the locations that don’t rain too much, then Kaikoura, Timaru, Alexandra, Queenstown and Christchurch are great spots (and even better if you like the snow!) and again familiar favourites like Nelson, Blenheim and Napier are top of the lists for lower average rainfalls.
6. Good healthcare
Healthcare is an obvious priority and there is nothing more important, so understanding the level of care should be a priority on your search list. The top six DHBs in regard to shortest stays in emergency departments during the past two years are West Coast, Wairarapa, Waitemata, South Canterbury, Bay of Plenty and Nelson/Marlborough.
Improved access to elective surgery happened best in Northland, Waikato, Taranaki, Waitemata and Tairawhiti (Gisborne). Faster cancer treatments were in Waitemata, Waikato, Canterbury, Nelson/Marlborough and Mid Central (Palmerston North).
7. A comfortable, low-maintenance, affordable home
While many retirees want to free up capital by selling their bigger home, they certainly don’t want to sacrifice comfort or style.
Low-maintenance is a no-brainer and a number of developers and owners of existing properties have created the perfect lock-up-and-leave and properties with low-fuss grounds to provide the right laid back atmosphere without the heavy workload.
Understanding what is affordable can be one of the biggest challenges, and can only be understood by the retiree, but one thing is for certain: the ‘affordability’ factor is changing. Today’s shifting retirees need to prepare a lot earlier and are up against a growing tide of working age home hunters who are either moving to the regions or seeking cheaper property on the outskirts of our big cities.
Classic retiree communities like Warkworth north of Auckland, or the Kapiti Coast north of Wellington, have quickly become commuter locations, with the resultant pressure on house prices. According to QV figures released in early March, the Kapiti Coast saw the greatest growth in the Wellington region with 13.8% year on year.
Despite that, such areas are still very attractive to retirees, given their good rail and road infrastructure, access to big-city amenities but their small-town vibe.
Some retirees who are definitely on the move could be able to shift into classic, but higher priced destinations like Tauranga and Nelson, and other beach communities close to the bigger cities. But some may be looking for lower-priced options to assist with the day-to-day spend and discretionary spending allowance for all those big trips planned. For a real bargain and if remoteness isn’t an issue, the West Coast has the lowest median house price at $183,000, Southland is $240,000 and Gisborne is $310,000 according to REINZ figures. Just think of the views and the stories!
But a look at the latest QV stats shows that some affordable homes are also in fairly handy locations and not far from appealing regional towns: Waikato towns like Matamata and Cambridge are options when compared to bigger cities, and South Waikato where Waitomo and Otorohanga values for February averaged $196,151 and $300,529 could be another option. Maybe not Tauranga, but Opotiki has an average of $334,445… and a great beach. Can’t stretch to Havelock North but how about Wairoa District at $162,447? Love the mountains? Try Ruapehu District at $183,680.
Across the country, no matter the price point, and with a little bit of research and talking with your local trusted agent, there will be the perfect match for the budget and the lifestyle you deserve.
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