Longer lives change retirement
Posted by propertysouthafrica on November 30, 2007
A number of socio-economic factors have driven the traditional model of retirement to change drastically over the last decade and retirement village developers are following suit to accommodate the changing needs of retirees.“People remain socially and economically active much longer than a couple of decades back and therefore it has become increasingly important to develop places of retirement which fulfil the needs of both socially active retirees as well as those in need of physical care,” says Jaco Rademeyer of Jaco Rademeyer Estates in Port Elizabeth.
With facilities such as a community hall, around-the-clock medical services and security remain focal aspects of retirement developments, Rademeyer says increased life expectancy is also changing the traditional type of ownership within retirement villages.
“Sectional title ownership is fast replacing the traditional life right concept as the preferred choice of ownership in retirement villages,” says Rademeyer who has been marketing a number of new retirement village developments in the city.
Liesel Greyvenstein of Greyvenstein Nortier Attorneys says in Port Elizabeth life rights allow the owner to use the unit for the duration of his/her lifetime, but the actual complex retains ownership. Where the concept of life rights is operative, buyers must be 50 years or older in terms of the Retired Persons Act and only the buyer is allowed to occupy the unit. No transfer duties are applicable as there is no title deed registration.
“With sectional title ownership transfer duties have to be paid but the buyer gain an asset and thus sectional title ownership provides a higher level of financial security,” she says. Greyvenstein says another positive aspect of sectionalised retirement village properties, says is that any one can buy a unit, though occupants should be at least 50 years of age.
“It is becoming a trend amongst younger investors to buy a sectional title unit in a retirement village and to let the unit to a person qualified by the Retired Persons Act to live within the village. This type of investment forms a solid base when planning for retirement,” Rademeyer says.
Financing is another major drive-force behind the increasing popularity of sectional title ownership amongst retirees. Banks do not finance life right ownership with a traditional mortgage bond and cash is needed to buy into this type of scheme, while sectional title ownership can be financed by a mortgage loan.
“People tend to live longer now than twenty years ago and though some banks insist that home loans should be paid up by the time the mortgagee reaches the age of 65, financial institutions are becoming more lenient about the age of applicants,” says Manda Zwiegelaar of Mortgage SA.
She says the focus is more on the ability to service the bond than the age of the home loan applicant. “A shorter period of repayment will be required, depending on the age of the applicant.”
In Port Elizabeth, the need for retirement accommodation, especially in the middle-segment of the market, is on the rise, says Rademeyer. “The latest trend is to revamp existing traditional old age homes to include facilities which accommodate social interactive needs as well as top frail care services and a high level of security.”
In one such development, the Louisa Myburg Retirement Village in Kabega, Rademeyer sold 35 life-right units, priced at R299,500 in a record time early last year followed by the release of 75 units in the AGS Kabega Park Retirement Village which are priced from R339k for bachelor units to R699k comprising of two bedrooms, a bathroom, single garage and a small garden.
“Plans for more such developments in the Westering area are in the pipe-line for early next year,” says Rademeyer.
- Mariana Martin, East Cape Property Guide.