The number renting renting retirees could double to more than 600,000 by 2048, the Retirement Commission says. File photo. Photo: 123rf.com
The private rental market will not be able to keep up with the demand for rental housing for the many pensioners who will need affordable and accessible homes over the coming decades, says the Retirement Commission.
The commission estimates the number of over 65s who are renting could double by 2048, to more than 600,000 superannuiants.
New research, based on interviews with more than 700 landlords, shows the private market will not be able to keep up with demand - particularly for accessible rentals.
Commission policy specialist Jordon King told Checkpoint few landlords had made accessibility modifications to allow ageing tenants to remain in their rental homes.
"A third of New Zealanders who have a disability are aged 65+ and we want people to actually remain in their homes and their communities for a range of reasons, but unless we have an age-friendly private rental sector, we're not going to get the outcomes that we need."
He said the assumption in this country has been when New Zealanders reach the age of 65, they will have a paid-off house and be able to use the equity in it to modify it and make it fit for purpose, but "that reality is gone".
King said three-quarters of landlords that the commission spoke to said it was important for ageing tenants to remain in a rental property, but at the moment few landlords actually had much experience with older tenants, with almost half never having a tenant over 65 years of age.
"Few have actually made the kinds of accessibility modifications that are needed to support people to remain in place, and while there is some openness to allowing modifications to happen, the cost and the type of modification that can be made are really flagged as big issues."
The report found 74 percent of landlords believed it is important for ageing tenants to remain in a property as they age and that landlords had positive perceptions of older tenants, as they are seen as reliable, respectful, and low-maintenance.
He said a number of landlords had been proactive about making modifications, and the commission's message to the others was that making those kind of changes could really pay off.
"Look at the tenant base that is coming through - actually, if you improve a house, if you put in that ramp or change the bathroom or widen the hallways etc., those are the sorts of things that people are actually going to want.
The Auckland Property Investors Association has also urged the private rental sector to urgently address the growing need for age-related modifications.
APIA general manager Sarina Gibbon said landlords "overwhelmingly" supported tenants' ability to remain in their homes as they age.
"Being uprooted from your home at 65 is not just disruptive but incredibly damaging. Our members get that and want to see their tenants age in place. As the older tenant cohort grows, the economics of property modifications will become increasingly justifiable.
"Landlords need to recognise that making properties accessible not only supports tenants but can also enhance the value and appeal of their rental portfolios."
King said the government had a role to play as well, especially with the issue of people on fixed incomes having to deal with market rents.
"To put it clearly, about 40 percent of people over 65 are reliant on NZ Super alone and about 20 percent have just a little bit more, so the challenge around fixed incomes and affordability is a big one. And what we said in our review of retirement income policies two years ago is that the cash asset test for things like the accommodation supplement needs to shift, because that hasn't been changed in a very long time.
"So we're going to need that kind of public investment to come, but we also need the state to step to the party when it comes to increasing the supply of easily assessable, smaller rental properties as well."
