Best to plan your retirement living arrangements early on

MANY p r o p e r t y o wne r s intended to downscale when they retired around the 2008 slump, but opted rather not to sell at a “perceived discount” because they were not under financial pressure.

These homeowners are now 6 years older, possibly not as healthy and may be unable to cope with their large properties. They need to downscale with more urgency than before, says Lanice Steward, managing director of Knight Frank Residential SA.

“This is confirmed by property economist, John Loos, in the FNB Property Barometer Estate Agents’ Survey for the first quarter of this year. The survey says that downscaling due to life stage continues to be the strongest driver of residential sales during this period.

“Loos explains that this form of downscaling refers to s e l l e r s who want s maller homes, usually either because they are getting older and can no longer manage their larger properties or their children have left home and they don’t need the extra space.”

Steward says the side effects of the increase in demand is an increasing pressure on the availability of retirement facilities, which are in short supply and many have closed their waiting lists.

“If you are in that age group or near it, it’s essential to plan well ahead so that when a change needs to take place, it will not put you under major pressure. Some people get caught with nowhere to go, and have to settle for accommodation that they are either unhappy with or it is not in the area they would prefer to live in,” she says.

One of the biggest problems is that it is difficult for people in the lower to middle-income brackets to find affordable retirement accommodation.

Many parents who cannot afford to buy into a retirement village are moving to a dualliving situation with their children, and s o t he need for dual living properties will increase and will start a trending in a positive direction, says Steward.

“More people are living longer, which will create a large bubble of downscalers needing retirement homes. Many of these will, in all likelihood, need medical and care facilities, which are in short supply.”