Opinion: In times of rapid change how can Auckland build for the future?

Managing Director of Dunphy Emmett and Property Council Auckland Regional Committee member Davida Dunphy considers how a hyper-aged population may influence future development.

One quarter of the population will be 65+ in 2048, compared with 16% in 2022 (Statistics NZ). Those over 85 are expected to increase to 251,000-305,000 (93,000 in 2022).  The fertility rate is already below the replacement rate, so while the 65+ population will steadily grow there is one model which predicts no overall growth as early as 2050 followed by a steady decline without increased immigration. 

This trend is not specific to NZ. 46% of countries had a fertility rate below replacement level in 2021, a number expected to increase to 75% by 2050. 

At the same time Kiwis are feeling more disconnected, unsafe and isolated.  While Auckland has lots of exciting experience live, work, play developments reactivating places and bringing people back from WFH the general problem of increasing loneliness and social isolation is not going away.  10% of people 65+ are lonely all or most of the time rising to 50% amongst those over 80[1].  A 2018 study revealed however that loneliness in New Zealand is highest among youth aged 15-24[2] with a recent survey of Y12-13 students showing 28% feel lonely once or twice a week and 17% every day. Loneliness is not an age issue.

Auckland in twenty, thirty years’ time is going to be different and continually prone to rapid change. While immigration figures are currently breaking records challenging NZ Stats forecasts, our new developments will still need to cater to this larger senior population and try to counter increasing social isolation.

The largest demand in housing is likely to be at either end of the bell curve, single residences and multi-family. 

We are going to need to work longer so commercial offices should provide for an increasingly aged workforce. Co-working hubs are twining with hotels but should they also sit alongside ‘retirement communities’?

What will bring the most people together socially? Should healthcare and wellbeing become the new anchor?  And given the aging demographic will then literally die out how can it also cater to the younger generation and/or flex to adapt its purpose. 

I was involved in the first few LIFT programs in the UK[3], a type of PPP that in 20 years has delivered over 350 community-based healthcare facilities which include community, integrated health and wellbeing centres, retail and housing. This program not only improved the primary healthcare estate but deliberately targeted depressed or un-serviced communities to reactivate social hubs and promote growth. 

A 2020 NZ healthcare infrastructure report revealed the extent of underinvestment with a lot of buildings rated poor or very poor. We know this asset area will be increasingly under strain in the coming decades so how can private development embrace this? Retail trends can change quickly but health and wellness can be more sustainable. Consumers of all generations are changing from acquisition mode with the demand for medical and wellness facilities serving both aging and health-conscious younger consumers continuing to trend upwards. 

LIFT is not perfect (and relies on a leaseback model which may be difficult to replicate here) but from listening to the potential future I couldn’t help but think this could be one solution which responded to an ageing population while also improving wellness and reactivating social communities in line with their demographics that may be able to be adapted for other public services/infrastructure

The program at high-level compulsory purchases old healthcare facilities in need of upgrade (which have a higher and better use) and the new land needed and brings the services together in new purpose-built hubs which align with commercial activities. The developer gets the land and uplift from selling/redeveloping the old properties and that capital in part (together with taking advantage of government lending rates) funds the development along with a continuous income stream from the ownership structure and commercial activities (whether through leasing or build to rent).   

This is not dissimilar to other public/private developments but is naturally more targeted.  

Single residences above wellness centres, commercial kitchens servicing cafes/restaurants and meals on wheels or RIPE based catering. Community hospitals where 8-10 beds can provide 24/7 care so you don’t need to go into hospital or you can pop in to receive dialysis or chemotherapy treatment. These services can be provided in the least commercial parts of a building and don’t need retail frontage.   

If development can wrap around public services, more land may become available to the private sector and it can flex and adapt to enable the right scale of development in the right location.  Very similar to the old advert where you dug one hole in the road and everyone laid their services at once, can we bring consortiums of PCNZ members together targeted at these future trends to free up the land and scale needed to deliver the biggest impact faster? 

The end product has to be fit for purpose and drive a commercial return but most significantly flex with these rapidly changing demographics. 

Davida Dunphy 

Managing Director Dunphy Emmett

Davida is a commercial property lawyer who advises some of the most well-known NZ retailers, investment funds, portfolio owners, local authorities, logistics companies and listed entities on their national development projects, leasing deals and day to day property management. Davida is a member of Property Council’s Auckland Regional Committee. 

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