Tuesday, October 16

Retirement capital of SA

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Beauty, climate and a relaxed lifestyle draw retirees to KZN, creating investment opportunities

Retirement property is the fastest-growing residential investment segment in the country, with statistics showing that in KwaZulu-Natal alone, 32% of people considering buying retirement property will do so for investment purposes.

The province is also being referred to as the retirement capital of the country, thanks to its ideal location, capital appreciation, and rental returns
“KZN is becoming South Africa’s number one retirement destination because of its competitive property prices and relaxed lifestyle, safe and beautiful location options, warm climate, and world-class facilities and amenities,” says Wicus Jacobs, director of Carmel Properties.

And with good location comes better capital appreciation expectancy. 

For example, residential developments in the Sibaya Coastal Precinct are expected to enjoy capital appreciation of at least 30% between securing units and subsequent transfer. And this appreciation is expected to be enhanced by off-plan retirement estates such as the new Shoreline Sibaya.

“Off-plan developments experience capital appreciation between securing the purchase upfront with a 10% deposit, and the transfer of the unit on completion. Usually the value of and demand for retirement property escalates once the development is complete.”

Other factors adding to the investment demand for retirement property include: the Baby Boomer generation living 10 to 25 years longer than their parents; retirement purchasing not always being possible for the elderly, creating a strong demand for renting; and retirement investors seeing larger and more reliable rental yields.

“Without foresight from both the buyers and developers, there is going to be a significant shortage of suitable retirement development opportunities in the foreseeable future,” says Murray Collins, director at Collins Residential, a subsidiary of H Collins & Sons Group.

“KZN is already seeing a huge gap with demand outweighing the supply.”

Collins says an example of capital appreciation can be seen within established retirement estates in Umhlanga, where some units have appreciated by more than 200% over two years, and where rents for a moderately sized 3-bedroom unit, fetches from R16 000 to R20 000 a month.

“This makes for an exceptionally strong and stable annuity income once the unit is paid off. We often find with the first buyers in a scheme like the Mount Edgecombe Retirement Villages the returns are fantastic,” he says.

Pet-friendly retirement properties are good investments with 38% of retirees indicating that a pet policy is a deal breaker for them, according to Retire KZN, a campaign launched by Tongaat Hulett. As a result, many new estate developments are shifting towards allowing pets.

Retire KZN says this is because pets have a positive effect on humans, especially the elderly.

Other than companionship, it has been discovered that living with pets has long-term health benefits which range from fighting depression to lowering cholesterol. And living with a pet can give new meaning to life for older people. 

Retire KZN says retirees are also putting security at the top of their lists when looking for suitable retirement homes, and for this reason new retirement estate developments are equipped with additional security that is specifically suited to the needs of the elderly.

“The normal requirements of controlling access and intrusion, as with any estate apply. With retirement estates, there is the additional requirement for monitoring the well-being of the residents. 

“This involves the added dimension of not only managing the possible security incident, but also the ability to respond to the urgent needs of the retired, and sometimes frail residents,” says Rob Anderson, estate security expert from Adamastor Consulting.
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