Brian Peat’s recent column (Opinion, ODT 18.8.25) makes for fiery reading. He accuses the government of dragging its feet, calls contracts "unfair," and even compares retirement villages to a Ponzi scheme.
It is a passionate critique, but passion should not come at the expense of accuracy and the facts.
Retirement villages are not financial scams. They are home to more than 53,000 older New Zealanders who, week after week, choose this lifestyle because it works for them.
Let us be clear: a Ponzi scheme is a fraud that collapses when no new money comes in.
Retirement villages are the opposite. They are heavily regulated, legally transparent, and backed by bricks, mortar, and decades of investment.
Residents receive independent legal advice before they sign anything. The licence-to-occupy model and deferred management fee (DMF) are disclosed upfront, and they fund the services, security and communities that villages provide.
Throwing around words like "Ponzi" may grab headlines, but it insults both operators who act within the law and village residents who made an informed, deliberate choice.
Peat’s strongest criticism is over exit payments. He claims residents’ money is "routinely held for years" and points to a figure of $2.8billion in "interest-free funds" as evidence.
This is misleading. That number reflects the combined value of all resident units across multiple operators, not idle cash sitting in a bank account.
Those funds are tied up in bricks and mortar, village infrastructure, maintenance and services, and they cannot simply be withdrawn on demand.
The average time for repayment is about five and a-half months, longer than a year ago, but entirely in line with normal property settlement times and the realities of relicensing homes to new residents after refurbishment, marketing and settlement.
Operators do not benefit from delay, they only receive their own return when a new resident enters.
More than 60% now voluntarily pay interest if repayments take longer than six months, weekly fees stop when a resident exits, and the DMF is capped at that point. These are safeguards that ensure costs are not piling up after someone has left.
The idea of forcing operators to hold all exit payments in trust sounds simple, but it is complete nonsense — who would pay the bank back for the cost of units and facilities if the money is held in trust?
Retirement villages are long-term, capital-intensive projects that recent independent research by Grant Thornton shows takes more than 20 years to break even.
Imposing rigid trust requirements would push up fees, increase entry costs, and ensure the demise of smaller community and charitable villages, precisely the people and places most at risk if reforms are done without care.
Retirement village operators are investing in modern care facilities that directly support the wellbeing of older New Zealanders.
They are the only parties building new care beds. Weakening the model would harm both the infrastructure and the people it cares for.
We can see the consequences elsewhere. In parts of Australia, mandatory buy-back rules forced operators to pay out regardless of resale. The result was higher fees for residents, the closure of smaller villages, and less choice for older people. That is not the "fairness" outcome anyone intends.
Mr Peat also suggests residents should share in "profits" if the model is resident-funded.
That misunderstands what a retirement village is. Villages are not investment products — they are homes.
The DMF is the mechanism that recovers the cost of running the community over a resident’s time living in a village — staff, maintenance, facilities, and services — not a dividend pool.
Without it, upfront and ongoing charges would rise dramatically, putting these communities out of reach for many older New Zealanders.
None of this dismisses residents’ concerns. We welcome the review of the Retirement Villages Act and support improvements like clearer contracts, fees stopping on vacation of units and stronger dispute resolution.
But reform must be grounded in evidence and designed to preserve choice, not destroy it.
Resident satisfaction cannot be ignored. Even Brian Peat acknowledges that all surveys consistently show over 90% of residents are happy with their decision, enjoying safety, companionship, independence, and certainty of cost and a pathway to care.
To suggest they are "trapped" or "exploited" misrepresents reality and undermines the very people the column claims to defend.
Older New Zealanders deserve fairness and they deserve choice. Quick fixes, sensational claims, and simplistic analogies will achieve neither.
Of course, moving to a village is entirely your choice — no-one is forcing you. But about 130 older Kiwis are making that choice every week.
Complaining about a choice made, especially after compulsory legal advice was required to ensure all terms were understood, is not the Kiwi way.
Retirement villages are communities that thousands of New Zealanders call home and that deserves to be respected.
■ Michelle Palmer is executive director of the Retirement Villages Association of New Zealand.
