Three years after moving into a retirement community near Auckland, Margaret and David Gardiner are thoroughly enjoying their new lifestyle - and the fact they’ve been quietly accumulating capital gains on their home.
Three years after moving into a retirement community near Auckland, Margaret and David Gardiner are thoroughly enjoying their new lifestyle - and the fact they’ve been quietly accumulating capital gains on their home.
In June 2021, the Gardiners moved into Karaka Lifestyle Estate at Drury, which is one of eight established or planned Karaka Pines Villages across New Zealand.
“We decided that we wanted to move in, while we still had the energy and health to be part of an active and connected retirement community,” Margaret said.
“A few years down the track, we’ve had no regrets at all about this decision.”
A big part of the Gardiner’s satisfaction is their home which, at three bedrooms in size, is spacious and large enough to accommodate family gatherings and stay-overs.
The home is also well-built and insulated, with far less maintenance requirements compared to their previous four-bedroom home.
They are also enjoying mixing with retirees of their own age, and seeing the way village residents come together to look after each other.
A further important factor for the Gardiners is that, unlike in most retirement villages, they are financially benefiting from all the capital gains on their home.
“Since we’ve moved in, our estimate is that this home has increased in value by around 25 per cent,” Margaret said. “This means that, through capital growth, we’ve already paid for the deferred management fee we need to pay when we leave the dwelling.”
“This is really important for us, for both the next stage of our lives and our family.”
Capital gains a key part of the Karaka Pines Villages model
The capital gain retention model is a key part of Karaka Pines’ innovative and new retirement living approach.
The vast majority of New Zealand retirement villages don’t allow residents to accumulate any capital gain on their dwellings, or allow only partial capital gain, while still charging residents a significant deferred management fee (DMF).
Karaka Pines, however, allows residents to keep all their capital gains.
Residents need to pay a facilities fee of either 12.5% or 25% of the sale price.
These fees are either on-par with, or lower than, applicable fees across the nation and in part come about through Karaka Pines spending comparatively less on marketing and advertising than other major retirement living players.
The 12.5% facilities fee applies where the resident agrees that weekly fees will change over time in line with cost increases, and the 25% facilities fee applies where the resident elects to have a fixed weekly fee for life.
Residents also need to pay for refurbishing their home to ‘as new’ condition, before the dwelling is sold.
Find out more: Discover the comparison between the Karaka Pines, and general industry, pricing models here
Everything you need to know.
Not just about capital gain
Karaka Pines CEO Adam Yates founded the company in 2010, after spending the previous 12 years in the retirement living industry and deciding residents deserved a better deal.
“It became clear to me that there were many existing retirement village residents who wanted to move out of their village, or into aged care, but that it was difficult for them to do this because they had given away their capital gain,” he said. “I didn’t think that was fair.”
“I take the approach that we are offering residents the services they need to really enjoy living in a retirement village.
“However, given it is residents that make the big investment through buying a home, they should deserve the capital gain benefits from this home.”
Find out more: See an interview with Adam here
Karaka Pines Villages Waihi Beach village.
Adam has since grown Karaka Pines Villages to become the nation’s largest retirement living provider offering full captain gains.
The company operates completed villages at Hamilton East and Tauranga, along with villages which are occupied but are still growing at Auckland, Hamilton, Rotorua, Christchurch and Waihi Beach.
An eighth village was recently approved, but has yet to begin development, at Papamoa in the Bay of Plenty region.
Homes at Karaka Pines Regency Park at Rotorua.
Homes are currently being sold across all these villages.
Adam says that, apart from capital gain, the way-of-life in a Karaka Pines Village is an important focus for his company.
“One of the things I say to all my staff is that, when someone has made a decision to move into our village, it is no longer about the capital gain model,” Adam said. “What we need to do is ensure these residents have a great retirement living experience.”
“At the end of the day, these are not our homes, but our residents’ homes. We are just visitors who are trying to help them live there and service their community.
“To this extent, the homes in our villages are generally bigger than the industry standard, to make it easier for family and friends to visit.
“Our villages are also located in great lifestyle locations, including in coastal areas, and have all the sorts of great recreational facilities retirees are looking for.”
A strong sense of community is an important part of living in a Karaka Pines Village.
Community is important
Margaret Gardiner agrees that community is an important component when it comes to enjoying a Karaka Pines village.
“We cook meals and freeze them for other residents when they are not well,” Margaret said.
“In addition, my husband has really enjoyed spending time with other men who are his own age, including in the men’s shed.”
Find out more about Karaka Pines, including homes currently available, at this link
This content has been prepared by Village Guide on behalf of Karaka Pines.
Further reading
The costs of living in a retirement village
How you can move into a retirement village even if you’re having trouble selling your home
Twelve key differences between a retirement village and regular home
