Retirement village supply varies widely across Europe
The supply of retirement village housing, sometimes called assisted living, varies widely across western Europe. We go through both demand-side and supply-side causes of this disparity.
For the purposes of this infographic, we define retirement village housing as accommodation in a communal complex exclusively for elderly people where some level of services and amenities are provided. This does not include more basic sheltered housing.
On the demand side, demographics plays very little role; all western European countries have a large and growing elderly population. Italy has the highest percentage of 75+ year olds in all of Europe, yet is one of the countries with the least assisted living capacity. Income is a much more important factor. Living in a retirement village is expensive so it is no surprise that richer northern countries have a much larger supply than poorer southern countries. But culture is undoubtedly also significant; the level of cohabitation between generations is much higher in southern countries and people are much less used to the notion of putting their parents in an elderly home or retirement village. This is, however, changing.
On the supply side the most important factors are the cost and availability of land, as well as regulatory restrictions and level of policy support (financial or otherwise) with regards to new developments. Differences in these determinants can also be compounded by differences in cultural preferences: in the UK, for example, not only is it difficult and costly to source land for new developments due to scarcity and restrictive planning laws, but affluent Brits are also much more averse to living in an apartment (as opposed to a house) than their continental counterparts, meaning the average amount of land required to build a retirement village is higher. It is therefore no surprise that the UK has a more limited supply than Germany.
There is also a lot of variation in how much of a country’s supply is provided by for-profit companies. This isn’t due to differences in profitability between different countries: investing in retirement villages isn’t substantially less profitable in the UK and the Netherlands than in France, for example. There is a significant amount of investment going into for-profit provision and it is for-profit provision that is growing most rapidly in all three of these countries.
It also isn’t the case that retirement village living isn’t viable on a large scale in the countries where supply is currently very low. Spain, Italy and Portugal are already very popular destinations for retirees from across the EU and numerous luxury nursing homes have cropped up across Portugal. There is no reason why retirement villages can’t take off in these countries in the coming years.
We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.
