According to figures available from Statistics South Africa, about twelve million South Africans will be over 60 by 2050. These seniors are the Baby Boomers, born after World War II and who grew up in the hippie era. They generally want to live as independently as possible, so it’s not surprising that demand for retirement developments with the necessary facilities is increasing around the country.
Offerings vary enormously from one retirement complex to another – from freestanding units to frail care and assisted living units and a host of recreational amenities such as clubhouses, restaurants, spas and hair stylists, as well as sports facilities.
Criteria
Top of most seniors’ priority lists is security, with privacy, functional living spaces, and low maintenance also of major importance. Frail care - or the proximity to medical care - is also important to potential buyers. Recently, the question of backup electricity has also been added to the list.
Other concerns include general lifestyle benefits such as recreational facilities, communal lifestyle and the general upkeep and appearance of the estate.
Ownership options
The two most common ownership options at retirement developments in South Africa are life rights and sectional titles.
Sectional title ownership is also an option for home buyers of all ages, whereas life rights are exclusive to people buying into a life rights estate. However, the two options differ significantly when it comes to monthly levies and what happens to the unit on the death of the owners.
One advantage of sectional title ownership is that your heirs stand to inherit an asset that will almost certainly have increased in value over time.
Disadvantages include:
- You may be obliged to sell and move out just when you most need security.
- You are liable for transfer duty or VAT when you buy and capital gains tax when you sell.
- Over and above monthly levies, you may be liable for special levies that cover large-scale renovations, refurbishments and improvements to security, among other things.
- You will also be liable for all maintenance, insurance, and security costs.
- As people age, they become more conservative and less inclined to spend money on upgrades, so the overall appearance of the complex may suffer.
John Chapman, director of Rabie Property Developers, says that many elderly people in sectional title developments mistakenly believe they are looking after their investments while they are actually running them into the ground.
“In the life right model, the developer manages the amenities to high standards, and when a resident dies or leaves for any reason, the home must be pristine for prospective new owners. The clubhouse and other amenities largely decide the value the developer achieves from the sale of the remaining assets, so it must always be immaculate,” says Chapman.
“Another advantage is greater certainty about levies and no surprise special levies to be concerned about. You can rest assured that you will always be living in a first-class complex without increasing levies.”
- The purchase of a life right grants you and your partner the security of guaranteed occupation for life. Partners who outlive the life rights owners will be entitled to stay on in the life right unit until their death.
- Life right homes are usually more affordable than sectional titles, as no transfer duty is payable on purchase. This is because you don’t own the property outright, unlike with a free title or a sectional title property.
- The developer is responsible for village maintenance, so there is no heavy maintenance liability for owners and levies are usually known in advance.
- When the life right owner dies, no capital gains tax is payable.
One possible disadvantage is that you don’t own the life right unit outright, so you cannot leave the property to your heirs in your will. However, the full purchase price will be refunded to your estate, after the deduction of an agreed administration fee.
Some popular options
Private Property lists homes at some of the most sought-after retirement developments in South Africa.
Greenkloof Retirement Village
Groenkloof consists of retirement villages in George, Great Brak River and Reebok on the Garden Route in the Western Cape. The villages include own title houses, assisted living flats, frail care units, sub-acute care facilities, community centres and a host of senior services. The villages will eventually house over 1 700 retired families, and more than 400 families have already moved into their homes.
View Greenkloof Retirement Village properties for sale.
Mount Edgecombe Retirement Village
Residents of this retirement village in KwaZulu-Natal enjoy full access to Kindlewood Estate amenities, like the community centre and function venue, as well as the sports facilities. With 14 hectares of open green space, it’s easy – and safe- to keep active along with your pets. You can also use the communal lounges, cafes, and dining room at the Mount Edgecombe Care Centre. Homes are priced from R2.95 million.
View Mount Edgecombe Retirement Village properties for sale.
Retire at Midstream
Retire@Midstream is a well-established retirement village in the heart of Midstream Estates in Centurion, Gauteng. The latest extension development comprises two-bedroom units with two bathrooms and single or double garages. North-facing living areas and bedrooms ensure the units get sun throughout the day. Each unit has two televisions, two air conditioners, an alarm system with motion detectors and panic buttons and a smoke detector. Quality finishes complement the practical and wheelchair-friendly floor plans. Residents enjoy the comprehensive medical and lifestyle services offered by Retire@Midstream, which is within easy access to churches, medical centres, hospitals, shopping centres and a variety of recreational facilities.
View Retire at Midstream properties for sale.
There is clearly increased activity and opportunities in retirement sales.
Writer: Sarah-Jane Meyer