Looking for Best Equity Return
Five minutes with Andrew Dallas
Founded in 2017, Karaka Pines Villages (KPV) has set out to provide a fair retirement alternative to mainstream providers.
Implementing their “New Generation model” is their way of respecting residents and offering them financial security.
This model, unlike most New Zealand retirement villages, allows for residents to earn capital gain on their home. In most villages, when a resident sells their home, they only receive back the purchase price value, with the extra 20-30% deferred management fee deducted. However, at a Karaka Pines Village, residents receive the capital gain for their home. This means if the market value of their home has increased, residents can receive profit on the resale of their home. Although they do pay a 12.5% leaving fee, this is significantly less than the mainstream model.
The origins of the firm came from the group trying to devise the fairest model for residents. They concluded the best model was to simply hand the village to residents once it had been developed. This way residents could “own their own”. When this was trialled, however, they found most residents didn’t want to run their own village. At this stage of life, many elderly people want to reduce responsibility rather than taking on new challenges running their retirement village. Learning from this, KPV designed this model as a middle ground. With their new generation model, operators can make a fair return but will also take care of the village in the long run (with the 12.5% facility exiting fee).
KPV’s marketing manager, Andrew Dallas, says this allows their residents to stay in the property market. If circumstances change, they are able to retain the majority of their equity and invest somewhere else later. He explains that treating residents with fairness and respect is most important to their team.
Despite the difference in their financial model, Andrew explains they still have high quality facilities for their residents.
At their largest village, Karaka Lifestyle Estate, there are plans underway for a bowling green, pool and gym with the existing historic clubhouse being extended. But he emphasises the
independence of their residents, with the majority of their residents maintaining relationships with their community and partaking in activities outside of the village.
Moving forward, their aim is to grow their villages across Aotearoa. By providing more homes for our aging population, they hope that this generation will choose their sustainable and fair alternative.