Information : The Growing World Retiree Market (Part IV)

THE GROWING WORLD RETIREE MARKET:

Marketing Challenges & Opportunities (Part IV)

By Mario G. Zavalla

Challenges and Opportunities Presented by the Growing Number of World Retirees

The knowledge that the number of the world’s elderly population is rising and will continue to rise in the distant future at a faster rate than what has happened in the last century should not be a reason for retirement project proponents to rejoice and be complacent.  First and foremost, they must not make the mistake of viewing this market as homogeneous in  character.  They must fully recognize the marketing implications not only of the differences in language but  also take into consideration the differences in age, health, gender, education, work and family history, income, motivation and other relevant socio-economic factors that  must be integrated into their marketing and development plans as well.

It’s a Retirees’ World

According to current projections, the global population will hit 8 billion by the year 2030 and will likely reach 9 billion by 2050. In the same token, it is also estimated that by 2030, one-fourth of the world’s population will be comprised of the silver-haired group. For sure, this will engender a big backlash affecting almost all facets of human life as it causes  severe strain in governments’ financial resources and  results in  structural changes in the patterns of taxation, investment, savings, consumption, health care, pension systems, labor movements, migration, and land use, especially housing.  From the points of view of  promoters of  retirement-related projects, however, such as retirement communities, hospitals, medicines, food, and of professionals like doctors, nurses, physical therapists, lawyers, real estate and travel agents and so on,   this situation will be a good opportunity for them to expand their businesses or start new ones.

Patterns in International Retirement Migration

More and more retirees are uprooting themselves from their home countries to relocate to other countries for  various reasons. This was echoed by the Retirement and Healthcare Coalition composed on the members of the European Chamber of Commerce of the Philippines. To emphasize this point, its Executive Director, Marc Daubenbuechel, advised Philippine developers to look beyond building mere “sleeping quarters” as other countries in the region have already went ahead with their own infrastructure build-up to get a bigger share of this ballooning silver market. He added, and I quote….”The country must be able to cater to their needs for retirement communities that fit their lifestyle”.

To provide a more insightful information about what retirees are looking for in a retirement area, I am summarizing a number of  observations taken from a research paper based on a survey conducted by Omar Lizarraga Morales from the Universidad Autonoma de Sinaloa, Culiacan, Mexico, to draw a profile of the American retirees who migrated to Los Cabos, Baja California Sur located in the Northwestern part of Mexico.

1.  As of 2006, the United States Department of State estimated that a total of 1,036,300 of its citizens are living in Mexico, including those with tourist visas.

2.  The real estate boom in the area at that time was attributed to the influx of American retirees.

3.  Of the 13,905 registered American residents living in the same area, 7,704 are men and 5,283 women of whom 7,486 are renters who live on income from abroad with most spending their time in pursuit of rest and relaxation.

4. 88% of those surveyed visited Los Cabos as tourists before settling. The respondents came from border states (California, Texas and Arizona) while some came from Washington, Colorado and Oregon.

5. 45% of the population surveyed are between 45 to 63 years old who belong to the segment of the U.S. population called the  “baby boomers”….those born after World War II from 1946 to 1964. This group, it was also noted, do not yet enjoy Social Security benefits. Those who are 64 years old and older who are eligible to receive Social Security benefits constitute 34% whereas those under 44 years old make up 21%. Majority of the respondents have medium-high to high income, are business owners, salesmen, managers, real estate agents and some are teachers, doctors, military personnel, et al.

6.  25% receive a monthly income between USD2,400 to USD5,000, 20% receive more than USD6,000 monthly, 5% receive USD5,100 to USD6,000 monthly while 22% receive between USD1,000 to USD2,300 monthly.

7.  64% of those surveyed are married, 18% are divorced, 12% are single and 4% widowed.

8. 53% of the surveyed population have a university degree, 11%, a Master’s degree and 5%, a doctoral degree.

9.  The majority of those in the medium-high to high social class live in gated communities near the beach.

10. The predominant reason for choosing to retire in the area was climate, lifestyle, the people, economy, beaches, etc.

11. The American residents in Los Cabos spend USD2,000 monthly on the average for taxes, recreation, medical services, consumption, domestic helpers and so on. In this regard, the paper categorized the American residents as individuals who seek a lifestyle regardless of cost and those  who want to spend less for a higher quality of life than what they can get in their home country.     

International migration for the purpose of retirement has become an increasingly important feature of demographic and social change in world economies since the last decade of the 1900’s. Aside from Mexico, this movement has benefited other Central and South American  countries like Brazil, Argentina, Colombia and a few others which are fortunate enough to be located or possesses certain  qualities that American retirees are looking for in a retirement place. Other retirement destinations like Portugal, Italy, Greece, Turkey, Hungary and Spain are preferred mostly by retirees from Denmark, Iceland, Finland, Norway and Sweden while Oceania, Australia and New Zealand are popular among retirees  from Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, Sweden, United Kingdom, China, Hongkong, Macau, North and South Korea, Mongolia and Taiwan.

Other Popular Retirement Destinations:

United Kingdom

Data taken from the Office of National Statistics show that 8 out of the top 10 retirement destinations in the United Kingdom are by the seaside. However, there are signs based on a survey that the typical lifestyle by the sea may be changing in favor of other priorities. For example, proximity to the sea has been relegated to number 7 among 10 criteria in the choice of a retirement destination . The selected priorities are presented below.

• Proximity to family – 49%
• A good public transport network – 43%
• Fresh air – 35%
• Amenities (bars, restaurants) – 30%
• Culture and entertainment (museums, art galleries, cinema, theatre) – 27%
• Proximity to the countryside – 25%
• Proximity to the sea – 19%
• A large community of other retirees – 7%
• Other – 4%
• None of the above – 11%

Chiang Mai, Thailand :

   

Fred Hultz, a retiree, summed up the reasons why he chose to retire in Chiang Mai,

Thailand:

       1.  The climate is favorable;
       2.   Your money will stretch further than you’ll believe;
       3.   The healthcare is excellent;
       4.   The housing is plentiful;
       5.   Lots of locals speak English;
       6.   There are over a dozen universities in town;
       7.   The food is unbelievably tasty.

Phuket, Thailand :

This retirement community is ranked number 22 among the top 30 retirement destinations in the world  in November 2013 by bestretirementdestinations.com. It is located on the northeast corner of the recently completed Laguna Village Phase I, The Lofts at Laguna Village are situated in three buildings surrounding a lake with lush landscaping and manicured grounds. Designed to accommodate an active lifestyle, these modern Loft-style apartments are stylish residential properties featuring sleek, trend-setting designs. 

  
CLUB MEMBERSHIP

The Lofts at Laguna Village

Price per unit ranges from USD 500,000 to USD 1,000,000 for units with floor areas ranging from 232 sq.m. to 557 sq.m.


. . . .to be continued.

Source:

www.theretirementcentre.com

www.bestretirementdestinations.com

About the Writer :

Mario G. Zavalla is a seasoned professional who has accumulated 30 years experience in middle and top management positions in private and government corporations  engaged in housing finance, commercial and investment banking, retirement promotions, manufacturing, management services and real estate development and marketing. After graduating from the Ateneo de Manila University, he took up MBA subjects at the Ateneo Graduate School of Business. 

He is a licensed real estate broker, a member of PAREB-Marikina Valley Real Estate Board Inc. and Philippine Institute of Real Estate Practitioners Inc. (PhilRES). He is an active online member of PAREB-MLS and PAREB Online  and runs his own real estate brokerage office using the trade name The LIST and SELL REALTY GROUP, the owner and operator of  The PHILISTINGS BANK.

Contacts:

Mobile:  0916-6444677     Duo:  507-5801

Principal Email:  phil.listings@gmail.com

Alternate Email:  supermarioz@yahoo.com.ph

Website:  http://www.philrealtybank.com