Buy young to en­joy years of older life­style

Learn about dif­fer­ent ways to in­vest to new re­tire­ment liv­ing mod­els, and the pros and cons

Weekend Argus (Saturday Edition) - - PROPERTY - BONNY FOURIE CHAL­LENGES

DE­VEL­OP­ERS are fu­ri­ously play­ing catch-up to meet the grow­ing de­mand for re­tire­ment ac­com­mo­da­tion, but along with this they have shifted their tar­get to a younger mar­ket.

Wes­ley Smith of Carmel Prop­er­ties, which launched re­tire­ment es­tate Shore­line Sibaya last year on the north coast of KwaZulu-Natal, says they have re­duced their age lim­its for en­try from 55 to 50 so res­i­dents can live there for longer.

“They can live here now with their mates, and go to the bars and gyms, and then con­tinue to live (that life­style) here in their older years.”

Collins Res­i­den­tial has in­vested in re­tire­ment vil­lages in KwaZu­luNatal, and says they have also shifted their tar­get to a younger mar­ket.

Collins Res­i­den­tial di­rec­tor Mur­ray Collins says: “Res­i­dents should be spend­ing their last 30 years in a won­der­ful place, and not just their last five, when they can­not re­ally ap­pre­ci­ate it.” The re­tire­ment de­vel­op­ment in­dus­try is boom­ing, but the is­sue of care still poses ma­jor chal­lenges. The “con­tin­u­ous care” model, for ex­am­ple, is a trend, but how do re­tirees fund this?

“Frail care, no mat­ter how well you build units or work out the right num­ber of units, is ex­pen­sive, and most med­i­cal aids do not cover any kind of frail care,” says Ev­er­green chief ex­ec­u­tive Arthur Case. New in­surance or med­i­cal aid prod­ucts could be one so­lu­tion, while an­other could be cross- sub­si­dies, which he favours, but ad­mits most de­vel­op­ers do not.

“With this a por­tion of your levy goes to­wards frail care so when it is your turn to be there the costs are not so as­tro­nom­i­cal.”

“Drop­ping” re­tire­ment of­fer­ings into es­tab­lished es­tates can also as­sist. If all res­i­dents use care cen­tres and/ or the es­tate takes pa­tients from “out­side”, it can im­prove the fi­nan­cial model.

Re­tirees also face pur­chas­ing chal­lenges. Due to the na­ture of the “life right” model, they can­not qual­ify for mort­gage bonds. How­ever, the aver­age mid­dle-in­come South African fam­ily has a home that is paid for and mod­est re­tire­ment sav­ings,” Case says.

“We try to bring to mar­ket a prod­uct at a price slightly lower than the com­par­a­tive free-mar­ket price so, hope­fully, when you sell the fam­ily home to buy a life right, this can free cap­i­tal to aug­ment your re­tire­ment sav­ings.”

Even buy­ing sec­tional ti­tle units in the tra­di­tional way has been an chal­lenge for re­tirees, says Wes­ley Smith of Carmel Prop­er­ties. Banks will not grant a re­tiree a mort­gage bond even if they al­ready own a home worth more than the unit they want to buy. The com­pany had to find a part­ner or­gan­i­sa­tion to pro­vide guar­an­tees on be­half of its buy­ers.

PIC­TURE: CARMEL PROP­ER­TIES

The first brick in the ground at Shore­line Sibaya in KwaZulu-Natal was the care cen­tre, which is re­garded as the most im­por­tant as­pect of a re­tire­ment vil­lage.

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