By charlie@urbanvillages.co

Introduction

When people talk about Retirement Living, they often use terms like Retirement Village, Lifestyle Village, or Land Lease Communities interchangeably. But these are three very different models, each designed for a particular stage of life and financial approach.

The Later Living sector is evolving rapidly. What was once dominated by traditional Retirement Villages has expanded into a diverse set of models, each designed to meet shifting social and economic realities.

Four powerful trends are driving this change:

• An ageing population that wants choice and flexibility in how and where they live.
• Rising affordability pressures, and increased age of entry (70+) making traditional Retirement Villages out of reach for many.
• A growing focus on lifestyle and wellness, with younger cohorts prioritising connection, activity, and independence.
• Baby Boomers seeking models which share resale/ capital gains.

In response, three main sub-sectors have emerged. Retirement Villages with Aged Care, Lifestyle Villages, and Land Lease Communities. Each comes with a different promise to residents, and a different risk and return profile for investors.

For operators and investors, understanding these distinctions is critical. Positioning a community correctly means matching the right model/s, with access to development capital, funding, operational function and market demand.

Retirement Villages (with aged care)

Retirement Villages are the most established and recognised part of the Later Living sector in NZ. 70% of all registered RVs in NZ have aged care, while only 30% of villages in Australia have care facilities – although many provide in home care services.

• Who they serve: Typically, people 70+, often moving in for peace of mind around future care. Their last home move.
• What they offer: Independent villas or apartments alongside onsite aged care – rest home, hospital, and sometimes dementia facilities.
• Financial model: Most operate under a Licence to Occupy (LTO) and a Deferred Management Fee (DMF) of 25-30%, commonly calculated on the initial entry price, which is deducted when the resident leaves. The operator usually keeps the resale gain (capital gain), although some private or smaller operators do offer some capital gains sharing. Operators also charge weekly fees to recover village OPEX.
• Key point: The big advantage is the “continuum of care” – residents don’t need to leave the community if their health needs increase.

Lifestyle Villages (no aged care)

Lifestyle Villages are a growing choice for a younger more active demographic who value community, security, wellbeing activities and social connection.

• Who they serve: Usually people in their early 60s to mid-70s who are healthy and independent seeking an active lifestyle with like-minded people.
• What they offer: Villas, townhouses, or apartments with strong lifestyle resort style amenities such as a concierge, clubhouses, spas, saunas, gyms, pools, sports facilities and in-depth social programmes.
• Financial model: Many use the same LTO + DMF structure as Retirement Villages, but without Aged Care. Many operators share capital gains but still charge a 20-30% DMF, usually calculated on the unit resale amount. Operators also charge weekly fees to recover village OPEX.
• Key point: These villages are about “upsizing lifestyle, downsizing property.” They suit people who want freedom, amenities, and social opportunities without the overlay of care. This can be an option for residents prior to moving into an RV with care.

Land Lease Communities (LLCs)

Land Lease Communities are well established in Australia but not in New Zealand. They combine affordability with ownership flexibility.

• Who they serve: People aged 50+ looking for a more affordable retirement housing option, albeit in recent times some operators are offering villages in Australia with high end product.
• What they offer: Residents own their home (can be a relocatable or manufactured home) but lease the land it sits on. Amenities are generally lighter, though many include a community clubhouse, pool, or RV storage.
• Financial model: No DMF - instead residents pay weekly site rent and weekly operating fees. On resale, they usually keep any capital gain on the home.
• Key point: This model lowers the upfront cost and allows residents to retain equity in their house or unit. The operator owns the land.

Final Thought

The right Later Living community comes down to three priorities: care, lifestyle, or affordability. For operators and investors, success depends on positioning a community clearly and aligning it with local demand.

Each model delivers very different financial outcomes and risk profiles. Choosing between them, or blending them into a hybrid, requires a clear strategy before committing capital.

While these three subsets provide a useful framework, they aren’t fixed categories. Increasingly, operators are experimenting with hybrid models to stand out and respond to market needs.

At Urban Villages, we help investors and operators navigate these choices - selecting the right model, planning and designing effectively, and delivering communities that balance lifestyle, wellness, and long-term financial sustainability.