Words: Georgina Guedes & Miriam Mannak | Image: Shutterstock
People are living longer and remaining in better health, which has changed the face of retirement estates and left developers struggling to keep up with demand.
The World Health Organisation’s 2015 World Report on Ageing and Health says the proportion of South Africa’s population aged 60 years and older will double from 7,7% in that year to 15,4% of the country’s total population by 2050. The number of South Africans of 60 years and older is now about 4,2 million. By 2050, this will swell to about 10 million.
Tongaat Hulett Developments’ Retire KZN market research initiative puts South Africa’s population at 56 million in 2017. It projects that the retirement market will increase by up to 5,86 million by 2050.
Retirement affordability is highlighted in this research – many pensioners are struggling to maintain their standard of living, and this occurs alongside low state pension benefits. Retire KZN notes a significant shift of younger buyers in retirement estates, with as many as 60% of purchasers buying as investors.
“We’ve seen a spike in the number of people between 30 and 35 showing interest in retirement investment,” says Stefan Botha, marketing director, Rainmaker, whose firm manages the marketing of Shoreline Sibaya on Durban’s North Coast and other villages such as Mount Edgecombe near Umhlanga. “Those looking to invest early are able to gain great rental return yields, some in the range of 8% to 10%. They also have the added benefit of living in the retirement estate when the time comes.”
What’s set to amplify the potential and future growth of South Africa’s retirement lifestyle sector is that most traditional retirement options don’t meet the needs of today’s retirees. Instead of being confined to a typical nursing or old age home, pensioners are now looking for independence, convenience, security and fun.
“Retirees desire the same facilities offered by conventional residential gated estates; amenities that will help them feel young and active in contrast to what you would assume to receive in traditional old age homes,” Botha says.
Hein Ehlers, CEO, Devmark Property Group, says demand for units from the company’s retirement portfolio, including The Plettenberg Manor in Plettenberg Bay, is outstripping supply. “There’s a waiting list of people who want to buy homes in the established villages,” he says. “Some of our retirement villages have shown a capital growth of 40% over three years.”