The Golden Years
By CATHERINE HARRIS - The Dominion Post
Last updated 05:00 05/12/2009

WARM THOUGHTS: How does the future look for the Golden Oldies? Business is already benefiting from things like more Pink Batts insulation and the next wave is expected to be double glazing.

 

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By 2050: The world's over-65-year-olds will triple to one in six people. The proportion of elderly Kiwis will grow from 12 per cent to 23 per cent. The number of New Zealand households will rise from 1.6 to 2.28 million. About 800,000 households will have an elderly person in it.

Like a slow-moving train, old age is creeping up on each of us. A child born today stands a decent chance of reaching 100, according to new research.

When they are in their 40s or older, New Zealand may have a population of 5.48 million and 1.3m will be over the retirement age of 65. That's double the proportion of senior citizens we have today.

What kind of world could we be in by then? Putting aside some of the really tough variables, like level of pension and climate change, the Centre for Housing Research Aotearoa New Zealand has had a crack at finding an answer.

Like other forecasts, its report predicts that taxpayers may be paying heavier taxes to support the increasing burden of pensions and healthcare.

Housing stock may also be under strain. A much larger number of people may be renting after retirement. Around half will have some form of disability and, depending on how we tackle it, many will be living in a state of housing disrepair and inequality.

The report believes well-insulated, accessible housing is going to be a large part of the solution to keeping the ageing population well and independent. But right now, our housing stock is not in good shape.

"We've got the New Zealand attitude of put on another jumper as applied to our housing and it does mean we don't live in very good houses," says Lois Easton, a research team leader at Beacon Pathway.

Beacon, a sustainable housing research consortium, estimates that 45 per cent of current housing has visible mould and half are below the recommended 18 degrees Celsius in their main room.

And the challenge doesn't just lie with old houses. "Our research would indicate that even though the houses we build now are better than the 1990s, they're still not good enough," Ms Easton says.

Many are still not well-oriented to the sun, are over-glazed and under-ventilated, so overheating is becoming an issue.

These and other features, such as solar energy and controlled water use, wide hallways and low switches, are part of what is called "lifetime design" in the building trade. Although many of these features come at no extra cost, "standard practice is not to include them", Ms Easton says.

As always, there will be a silver lining for some businesses from the ageing dilemma. Phillip King, a spokesman for Fletcher Building, says thanks to insulation subsidies in New Zealand and Australia, retrofitting is providing the bright spot in the company's current performance.

"Demand would be up 20 to 30 per cent in New Zealand for Pink Batts."

Mr King notes that it's not just demographics that is fuelling demand for certain products, but bigger houses and rising standards.

"Standards have risen immeasurably over time and that will continue. I think the next wave which is starting to happen is double glazing, which I understand is almost mandatory in the South Island now."

As well as updating existing stock, the building industry may be faced with a new housing need.

Statistics show households are getting smaller, with 3.3 people for every house in 1971, compared with 2.4 people expected in 2021.

However, those who want to downsize and release some cash may struggle to find suitable housing. The cost of land and the drive for more floorspace has resulted in many two-storeyed new houses. The country is short of thousands of units with disabled access.

It could mean more work for builders but Warwick Quinn, chief executive of Registered Master Builders, says the industry is unlikely to pre-empt demand.

"As the population ages and people's needs change, they will theoretically request homes of a different ilk and builders will build to those so it probably starts earlier on in the process with architects and designers understanding these issues ... We do not have a huge speculative market here."

Westpac economist Brendan O'Donovan says it's also important to realise the population will be ageing, not declining.

"Some people's prognostications seem to be on the basis that everyone's going to be old. There'll be more elderly, but there'll be the same number of young and middle aged as we've got now ...

"There is still going to be a demand for family homes in Churton Park and mansions in Remuera."

Not everyone will want to downsize, says Martin Evans, president of the Property Investors Federation.

"A lot of the older couples now are staying in their family home. They might have four bedrooms but they're using one as a gym, one as a home theatre, or a sewing room or guest room ... and they're likely to find if they sold their house and move into a small flat or townhouse, it's costing them just as much to move from one to the other so they might as well stay where they are."

With a projected surge in elderly renters, Mr Evans says landlords are keenly aware that the elderly are becoming a bigger part of their market. "A lot of them will want to have a certain type of house, single storey, small sections and we'll have to cater for that kind of person."

The burgeoning wave of elderly also has resthome and retirement village operators expecting "exponential growth".

Alan Edwards, chief executive of Metlifecare, has seen the "lifestyle village" concept for independent over-55-year-olds blossom from zero in the mid-1980s to 5 per cent of all senior citizens today.

Even if there is no further increase in market share, he says the industry will need 20,000 more units by 2050, 500 a year. Its target is double that. "So, as an industry we not only have to cope with more people in our demographic, we have to cope with a growing demand."

Of course, not everyone over 65 will be retired. There will be fewer taxpayers to fund higher expenditure, "and that's a pretty hard gap to close", Westpac's Mr O'Donovan says. "Flexibility in the labour market will be critical so we will get rid of any ageist attitudes from employers, and they could offer more flexible working arrangements, job-share work from home. Anything to encourage people to stay in the workforce for longer."

Town planners and architects are also inextricably linked to the ageing picture, since they have a big influence on the likelihood of elderly people being able to stay in their homes. In Australia, demand for aged-care services is expected to rise from NZ$9.5 billion in 2002 to NZ$130.5b by 2042.

Catherine Bridge, an associate professor and expert in aged assets at the University of New South Wales, says "ageing in place" can save governments a lot of money but it only works if home modifications and access to helpers are available.

"If we're serious about ageing in place, the design of the home and location of the home in relation to access is critical."

This is where town planning and urban intensification join the debate. Good public transport, walkable footpaths and proximity to town are going to be important when an estimated 325,000 don't have a driving licence.

Will elderly-friendly developments be built miles from main hospitals or will many smaller, probably private hospitals and nursing services spring up in greenfield areas?

"That's why it's more of a social issue of which housing's a part and not the only part," Mr Quinn says.

Housing Minister Phil Heatley says his Government has taken the lead on some of these issues. Besides insulation subsidies and a stocktake of the mix of state housing, it is spearheading changes to the Resource Management Act and unit land title legislation, in the hopes this will encourage medium density housing.

"I believe that urban and apartment living could be become very attractive for the next generations of older people," Mr Heatley says. "Moving into a mixed environment with residential, retail and entertainment could well prove to be attractive to the 65 to 80 year age group, and perhaps provide some competition to our existing retirement village industry."

The report's author, Kay Saville-Smith, hopes the scenarios she outlines will spark discussion and make various sectors realise they are all connected to the big picture.

"This is not inevitable, but if we allow things to go on as they are, it will end up looking pretty much like this.