A loom­ing new hous­ing cri­sis

Weekend Argus (Sunday Edition) - - SPORT - Arthur Case

AL­READY at grave lev­els in the Western Cape, the short­age of hous­ing could soon pro­duce a new cri­sis: a deficit in ac­com­mo­da­tion for the el­derly.

The num­ber of peo­ple over 60 years of age is grow­ing sig­nif­i­cantly and is ex­pected to dou­ble by 2050. Statis­tics SA says the per­cent­age of South Africans older than 60 in­creased from 6.61 per­cent in 2002 to 8.01 per­cent last year.

In the Western Cape, women make up a sig­nif­i­cant ma­jor­ity of the older pop­u­la­tion be­cause of longer life ex­pectancy.

Statis­tics show that, in re­cent years, the num­ber of older per­sons ver­sus ev­ery 100 chil­dren born in the prov­ince has in­creased. This is mainly the re­sult of im­proved med­i­cal knowl­edge, bet­ter ac­cess among the more af­flu­ent to so­phis­ti­cated med­i­cal care, and a greater fo­cus on healthy eat­ing and fitness.

The trend has sig­nif­i­cant im­pli­ca­tions. So­cial se­cu­rity and pri­vate pen­sion funds will be stretched, med­i­cal ser­vices will be un­der pres­sure, and the mas­sive short­age of re­tire­ment ac­com­mo­da­tion will be ex­ac­er­bated.

The state will be un­der pres­sure to ad­dress the need for re­tire­ment hous­ing, a daunt­ing task con­sid­er­ing the lack of hous­ing in gen­eral.

Where ac­com­mo­da­tion specif­i­cally suit­able for the el­derly is con­cerned, the prop­erty de­vel­op­ment in­dus­try has fallen be­hind. It is only more re­cently that the in­dus­try has started build­ing the sort of re­tire­ment life­style vil­lages that have long been avail­able in the US for the mid­dle-class re­tired pop­u­la­tion. Be­cause th­ese de­vel­op­ments were not done 20 or 30 years ago, the de­mand for ac­com­mo­da­tion cur­rently ex­ceeds the sup­ply, and it is likely to get worse as the gen­er­a­tion of peo­ple now in their 40s and 50s gets older.

A fur­ther con­sid­er­a­tion is the af­ford­abil­ity of re­tire­ment ac­com­mo­da­tion. Even those who have had steady em­ploy­ment through­out their work­ing lives are of­ten not able to re­tire in a fi­nan­cially strong po­si­tion, and so de­vel­op­ers are find­ing that they have to come up with flex­i­ble pay­ment op­tions for peo­ple who want to live in re­tire­ment vil­lages.

There are two el­e­ments of the costs that peo­ple must con­sider. The first is the cap­i­tal out­lay for the pur­chase of a unit in a re­tire­ment vil­lage. Prices vary con­sid­er­ably based on the na­ture of the vil­lage and the ac­com­mo­da­tion, from about R1 mil­lion up to per­haps R4m. Un­like the cost of a sec­tional ti­tle unit, the pric­ing for a life right – a model be­com­ing more com­mon for re­tire­ment ac­com­mo­da­tion – can be adapted to suit the pur­chaser, par­tic­u­larly some­one who does not have ac­cess to the full cap­i­tal amount of the pur­chase price.

With life rights, a pur­chaser can of­fer a lower amount, and the dif­fer­ence be­tween the price and what is ac­tu­ally paid is re­cov­ered by the de­vel­oper when the unit is resold af­ter the buyer passes away.

The sec­ond com­po­nent is monthly levies. Th­ese cover many of the ex­penses some­one liv­ing in their own home would have to pay for, such as se­cu­rity, main­ten- ance of the build­ing and gar­den, the use of a gym and swim­ming pool, ba­sic med­i­cal as­sis­tance and mu­nic­i­pal rates.

Over time, levies will in­crease with in­fla­tion, so the pur­chaser should be pre­pared for this. Buy­ing into a large re­tire­ment vil­lage, such as the Ev­er­green Life­style No­ord­hoek Vil­lage, with its 150 houses and 200 apart­ments, is some­thing to con­sider, be­cause the levies are less likely to in­crease as much. When one has more res­i­dents shar­ing the costs of main­tain­ing and run­ning the vil­lage, the costs per unit will be kept down.

With so much to con­sider, plan­ning by both the in­dus­try and fam­i­lies is cru­cial. Arthur Case is the chief ex­ec­u­tive of Ev­er­green Life­style, a provider of re­tire­ment ac­com­mo­da­tion in South Africa.

Arthur Case, the chief ex­ec­u­tive of Ev­er­green Life­style.

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