New Zealand's aged care sector faces $650 million funding gap

New Zealand's aged care sector is facing a $650 million funding gap even as retirement villages generate about $5 billion a year in sales, according to a new report cited by RNZ. The findings point to a widening disconnect between property revenue and the cost of delivering care.

The report suggests a lack of profitability in the care component of the business, as opposed to the property and village-sales side, may be discouraging further investment in aged care capacity. Providers have warned that without additional funding, the sector may struggle to keep pace with an aging population.

The findings are likely to add pressure on policymakers to reassess how aged care is funded in New Zealand, as demand for care beds continues to grow. Industry groups say the funding model needs to better reflect the actual cost of care delivery.