1 00:00:00,120 --> 00:00:04,040 Speaker 1: Now the country's largest age care operator is pumping up prices. 2 00:00:04,320 --> 00:00:06,920 Speaker 1: Ryme In Healthcare will increase its deferred management fees. That's 3 00:00:06,920 --> 00:00:10,200 Speaker 1: the amount that residents pay when they finally permanently vacate 4 00:00:10,240 --> 00:00:13,240 Speaker 1: their units, and also the weekly fixed charges they're going 5 00:00:13,280 --> 00:00:15,160 Speaker 1: to go up as well. Dean Hamilton is the Ryman 6 00:00:15,280 --> 00:00:16,480 Speaker 1: Healthcare executive chair. 7 00:00:16,520 --> 00:00:19,400 Speaker 2: Heyden, Hi, Hey, how are you well? 8 00:00:19,440 --> 00:00:22,320 Speaker 1: Thank you know, you're essentially pumping up your deferred management 9 00:00:22,320 --> 00:00:25,160 Speaker 1: fees because people are living. 10 00:00:24,239 --> 00:00:28,400 Speaker 2: Longer, right, well, I wouldn't call them pumping up. We are. 11 00:00:28,560 --> 00:00:31,160 Speaker 2: We're moving more to a market basis. We've currently got 12 00:00:31,200 --> 00:00:34,920 Speaker 2: a twenty percent deferred management fee, which essentially is rent 13 00:00:34,960 --> 00:00:38,440 Speaker 2: that we take off the resident when they depart so 14 00:00:38,440 --> 00:00:40,360 Speaker 2: they don't pay rent on the way through. So we're 15 00:00:40,360 --> 00:00:43,280 Speaker 2: currently about twenty percent of the value they give us 16 00:00:43,320 --> 00:00:44,919 Speaker 2: when they move in, and we're going to move that 17 00:00:44,960 --> 00:00:46,960 Speaker 2: to thirty percent, which is where the majority of the 18 00:00:47,000 --> 00:00:51,400 Speaker 2: market is a large part because people are living longer 19 00:00:51,400 --> 00:00:55,160 Speaker 2: and staying with us longer. So we just believe we 20 00:00:55,160 --> 00:00:57,240 Speaker 2: need to get that restructure right to reflect that. 21 00:00:57,320 --> 00:00:59,600 Speaker 1: I mean, that's obviously going to only affect new residents. 22 00:00:59,600 --> 00:01:01,920 Speaker 1: Would do You're not changing existing contracts. 23 00:01:02,440 --> 00:01:05,000 Speaker 2: That's a key thing here that it's all about new residents. 24 00:01:05,640 --> 00:01:08,479 Speaker 2: We've got lifelong commitments for all our current residents, whether 25 00:01:08,520 --> 00:01:11,320 Speaker 2: that's on DMFF or whether that's the weekly fees. So 26 00:01:11,720 --> 00:01:14,600 Speaker 2: this is from one October the shift for a new resident, 27 00:01:14,680 --> 00:01:17,959 Speaker 2: there'll be a choice of DMF thirty or twenty five, 28 00:01:18,200 --> 00:01:20,360 Speaker 2: and there will be either a fixed fee or an 29 00:01:20,360 --> 00:01:24,440 Speaker 2: inflating weekly fee. So hopefully you know, for the whatever 30 00:01:24,680 --> 00:01:26,839 Speaker 2: financial position they're in, we can find a solution. 31 00:01:27,080 --> 00:01:29,479 Speaker 1: But so what that means then is that you're potentially 32 00:01:29,680 --> 00:01:31,800 Speaker 1: a couple of decades, if not more, away from actually 33 00:01:31,800 --> 00:01:32,720 Speaker 1: seeing this flow through. 34 00:01:32,840 --> 00:01:36,720 Speaker 2: Right, Probably not a couple of decades. The average person 35 00:01:36,760 --> 00:01:42,640 Speaker 2: in the living sect and up stays around nine years 36 00:01:42,959 --> 00:01:43,600 Speaker 2: our decade. 37 00:01:43,760 --> 00:01:45,360 Speaker 1: Yeah, thank you, fair enough. But what about the weekly 38 00:01:45,400 --> 00:01:47,000 Speaker 1: fixed charges? How much are they going up by? 39 00:01:48,080 --> 00:01:50,480 Speaker 2: So we haven't said that it differs by region, difference 40 00:01:50,560 --> 00:01:54,000 Speaker 2: by country. We've got our fifty villages. Ten of those 41 00:01:54,040 --> 00:01:57,560 Speaker 2: exist in Victoria. We've got forty throughout New Zealand, so 42 00:01:57,600 --> 00:02:02,080 Speaker 2: they'll be different by by country, and we will look 43 00:02:02,120 --> 00:02:05,920 Speaker 2: to largely move our current rate to an indexed rate. 44 00:02:06,000 --> 00:02:08,639 Speaker 2: So if you're paying roughly two hundred dollars an hour. 45 00:02:09,240 --> 00:02:11,680 Speaker 2: That around that rate will be a base fee that 46 00:02:11,720 --> 00:02:15,440 Speaker 2: you'll index off, and depending on the region, we'll then 47 00:02:15,480 --> 00:02:18,200 Speaker 2: have a higher fixed fee that says that'll never move again, 48 00:02:19,040 --> 00:02:21,359 Speaker 2: but that needs to capture nine years of inflation. So 49 00:02:21,600 --> 00:02:24,480 Speaker 2: it's a significantly higher number than the new weekly. 50 00:02:24,600 --> 00:02:25,760 Speaker 1: Okay, do you know how much high? 51 00:02:27,000 --> 00:02:29,639 Speaker 2: Well, again, it will change by regions, so we're kind 52 00:02:29,639 --> 00:02:31,600 Speaker 2: of not putting a price list out in the media today. 53 00:02:32,960 --> 00:02:35,800 Speaker 2: Will differ by region. So in terms. 54 00:02:35,639 --> 00:02:37,480 Speaker 1: Of the number of units that we've got available in 55 00:02:37,520 --> 00:02:39,720 Speaker 1: the country, are we meeting demand yet or are we 56 00:02:39,760 --> 00:02:40,840 Speaker 1: still lagging here? 57 00:02:42,160 --> 00:02:45,560 Speaker 2: Well, I think in terms of the current mark there, 58 00:02:46,160 --> 00:02:48,839 Speaker 2: we are reasonable balance at the moment, probably a little 59 00:02:48,880 --> 00:02:53,680 Speaker 2: bit more supply than demand because the residence obviously we've 60 00:02:53,680 --> 00:02:56,320 Speaker 2: still got this wave of aging population, but they are 61 00:02:56,320 --> 00:02:59,240 Speaker 2: now struggling to sell their houses because of the residential 62 00:02:59,280 --> 00:03:02,680 Speaker 2: property market. So invariably hither they need to sell their 63 00:03:02,720 --> 00:03:06,200 Speaker 2: family home and take that capital and purchase an occupational right. 64 00:03:06,280 --> 00:03:10,040 Speaker 2: And I think Auckland clearance rates are roughly twenty five percent, 65 00:03:10,160 --> 00:03:11,920 Speaker 2: so we have these people signed up, but they're just 66 00:03:11,960 --> 00:03:14,920 Speaker 2: struggling to sell their houses. So you know, I think 67 00:03:14,960 --> 00:03:17,960 Speaker 2: that will take a little bit of time to work through, 68 00:03:18,400 --> 00:03:18,799 Speaker 2: do you. 69 00:03:18,840 --> 00:03:21,480 Speaker 1: Have but then okay, so let's say we work through that, Dean, 70 00:03:21,680 --> 00:03:23,919 Speaker 1: then where are we Are we going to have still 71 00:03:23,960 --> 00:03:26,079 Speaker 1: supply outstripping demand or all that flip around? 72 00:03:26,960 --> 00:03:30,040 Speaker 2: I think they'll flip around because, in essence of the 73 00:03:30,280 --> 00:03:34,360 Speaker 2: recent report done by the government by an independent company 74 00:03:34,360 --> 00:03:37,320 Speaker 2: called SAPIA, in the next teen years will be twelve 75 00:03:37,440 --> 00:03:41,800 Speaker 2: thousand age care beds short, and there's potentially going to 76 00:03:41,800 --> 00:03:45,440 Speaker 2: be a similar number of retirement villae udits short as well. 77 00:03:45,520 --> 00:03:48,280 Speaker 2: So yeah, I think the danger will be particularly on 78 00:03:48,320 --> 00:03:51,040 Speaker 2: the age key is setting with. You know, we believe 79 00:03:51,080 --> 00:03:55,200 Speaker 2: the government underfunding age here residential age communities, and people 80 00:03:55,240 --> 00:03:57,320 Speaker 2: just aren't going to be building those new villages, which 81 00:03:57,320 --> 00:03:58,960 Speaker 2: is one of the reasons why we're pause. We want 82 00:03:58,960 --> 00:04:03,200 Speaker 2: to see what this government lands before we start building 83 00:04:03,200 --> 00:04:05,160 Speaker 2: more beds. We said we will, but you know, you 84 00:04:05,280 --> 00:04:10,520 Speaker 2: have to provide a reasonable return on capital. Otherwise these 85 00:04:10,560 --> 00:04:12,840 Speaker 2: people will not come into villagers, They'll end up in 86 00:04:12,840 --> 00:04:15,280 Speaker 2: your hospitals and they will cost you even more. So 87 00:04:15,720 --> 00:04:17,280 Speaker 2: we just think they need to lean in that one. 88 00:04:17,240 --> 00:04:19,960 Speaker 1: Hundred and twelve thousand number. Is that just baby boomers 89 00:04:20,040 --> 00:04:21,920 Speaker 1: or are we starting to count the exits there as well. 90 00:04:22,640 --> 00:04:25,000 Speaker 2: Now that's twelve thousand, not one hundred and twenty thousand, 91 00:04:25,120 --> 00:04:28,880 Speaker 2: twelve thousand, twelve thousand, twelve thousand. They'll be short in 92 00:04:29,120 --> 00:04:31,040 Speaker 2: AGEK beds within ten years. 93 00:04:31,200 --> 00:04:32,560 Speaker 1: Okay, so that's still baby boomers. 94 00:04:32,640 --> 00:04:36,279 Speaker 2: Yeah, yeah, that's just the aging population now, and you 95 00:04:36,320 --> 00:04:37,479 Speaker 2: know it's coming when. 96 00:04:37,360 --> 00:04:41,080 Speaker 1: You guys cast ahead, when that baby boomer bubble bump 97 00:04:41,200 --> 00:04:43,160 Speaker 1: goes through, are you guys going to end up having 98 00:04:43,160 --> 00:04:44,160 Speaker 1: way too many units? 99 00:04:45,400 --> 00:04:48,360 Speaker 2: No? I think if most of those demographics that run 100 00:04:48,400 --> 00:04:51,960 Speaker 2: through there, that's at least twenty five years away. And 101 00:04:52,080 --> 00:04:57,119 Speaker 2: so that's that's beyond my time frame, so not mine though. 102 00:04:58,960 --> 00:05:01,200 Speaker 2: Oh you're lucky, you're younger. It will have a bed 103 00:05:01,240 --> 00:05:03,600 Speaker 2: for you. It will give a bed for you. 104 00:05:03,760 --> 00:05:05,920 Speaker 1: Under millennials, I thought the millennials were a really big 105 00:05:05,920 --> 00:05:06,680 Speaker 1: cohort as well. 106 00:05:08,400 --> 00:05:10,279 Speaker 2: Now, what do you describe as a millennial. Everyone's got 107 00:05:10,320 --> 00:05:11,120 Speaker 2: a different definition. 108 00:05:11,320 --> 00:05:14,360 Speaker 1: Okay, Well, I thought a millennial is sort of anyone 109 00:05:14,480 --> 00:05:17,600 Speaker 1: up to about like forty forty three, is forty four ish? 110 00:05:18,480 --> 00:05:22,120 Speaker 2: Yeah, that's still homeowners, isn't it? By and large? Yea, 111 00:05:22,920 --> 00:05:25,760 Speaker 2: And so they will be looking to I think I 112 00:05:25,800 --> 00:05:28,240 Speaker 2: think the future. In my view, there'll be a combination 113 00:05:28,360 --> 00:05:32,680 Speaker 2: of people aging in place in their homes. Also people 114 00:05:32,720 --> 00:05:37,320 Speaker 2: wanted to move into residential age Kere like a Rhyming 115 00:05:37,440 --> 00:05:39,760 Speaker 2: village that has a continuum of key. You can start 116 00:05:39,760 --> 00:05:42,720 Speaker 2: out independent, you got a garage in your car and 117 00:05:42,720 --> 00:05:44,560 Speaker 2: you're driving the golf, but you're coming back, you having 118 00:05:44,600 --> 00:05:47,880 Speaker 2: dinner there from in the Paul playing bowls and then 119 00:05:47,960 --> 00:05:49,919 Speaker 2: as you know, as you get older or your partner 120 00:05:50,320 --> 00:05:52,400 Speaker 2: it becomes ill. You can move into service or you 121 00:05:52,400 --> 00:05:55,200 Speaker 2: can move into kre. So yeah, we still think the 122 00:05:55,240 --> 00:05:59,720 Speaker 2: product is remains a high demand and it'll be part 123 00:05:59,760 --> 00:06:02,719 Speaker 2: of the's nothing Roughly. I saw a number today twelve 124 00:06:02,760 --> 00:06:07,160 Speaker 2: percent of people ever seeing me father actually inside resident Thelitzo. 125 00:06:07,320 --> 00:06:10,080 Speaker 2: We're not saying it's the sole answer, but certainly part 126 00:06:10,120 --> 00:06:11,039 Speaker 2: of the solution we think. 127 00:06:11,400 --> 00:06:12,880 Speaker 1: Dean, it's very good to talk to you. Thank you 128 00:06:12,880 --> 00:06:16,880 Speaker 1: so much, really appreciated. That's Dean Hamilton, Rhyman Healthcare's executive chair. 129 00:06:17,720 --> 00:06:20,880 Speaker 1: For more from Hither Duplessy Alan Drive, listen live to 130 00:06:21,000 --> 00:06:24,000 Speaker 1: news talks. 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