The average price of a property in retirement complexes is R1.9 million, according Lightstone data which showed that a total of R29 billion was spent on over 15,000 properties in a period of five years.
Lightstone is a provider information, valuations and market intelligence about property in South Africa.
Most of the sales took place in KwaZulu-Natal, the Western Cape and Gauteng, with the Western Cape having the highest average sales prices.
Data from Lightstone showed that the SA formal retirement property market accommodates 44,000 households, representing a small but significant segment of the country's housing landscape.
While there is a large number of seniors currently living in homes they purchased earlier in life, the demand for purpose-built retirement communities is increasing.
Factors that are driving this trend include:
– A growing senior population
– Changes in lifestyle preferences
– Rising financial security among older adults.
Hayley Ivins-Downes, Managing Executive Real Estate, Lightstone said that the data shows that, of the 5.45 million residential properties in SA, excluding social housing, around one third is owned by people who are over the age of 60.
Of those property owners, a quarter of them bought their properties after they turned 60 while just 44,000 of these properties are in formal retirement villages. This suggests that the properties are targeted at the upper end of the market.
Property ownership among people who are older than 60 is split between subsidised housing (1.3 million), non-retirement housing (1.5 million), and formally registered commercial retirement homes (44,000).
Lightstone said that they have identified around 650 retirement complexes in South Africa that are either estates or sectional schemes that use words like "retirement", "old age", "bejaard", "aged", or "outehuis" in their name.
Around 350 of these complexes are registered at the Deeds Office (44,000 units), while on the other hand, 300 entities are registered as one property at the Deeds Office but owned by, or allocated to, social services who manage units.
These 650 complexes account for less than an estimated 100,000 units and no more than 125,000 individuals, a small number of the more than five million people who are 60 years of age or older.
Ivins-Downes said: “The 350 complexes containing units registered at the Deeds Office account for 44,000 properties, of which 33,000 are privately owned and 11,000 are owned by companies or trusts.
“These properties house anything between 44,000 to 88,000 people, assuming one or two people live in each property. More than half of the properties are valued at more than R1.5 million.”
There's a significant gap in the availability of formal retirement housing options, according to Ivins-Downes.
The 650 retirement complexes identified by Lightstone only accommodates a small percentage of the senior population, highlighting the need for more diverse and accessible retirement housing solutions, particularly in the affordable segment.
Around 13% of the retirement property stock was developed after 2020 while just over 25% were built before 2000. The balance of retirement properties were built in between.
Some 35% or 15,000 properties are in estates like gated communities with a shared access/exit gate and 65%, or 29,000, are sectional schemes.
Ivins-Downes said that the majority of the 1.5 million non-retirement properties owned by people who are 60 and older are freehold, followed by sectional schemes and then estates.
“Interestingly, though, buyers who were 60 or older when they bought their retirement homes opted for estates or sectional schemes in greater numbers, while those who bought when they were younger, preferred Freehold properties, reflecting the overall pattern in the property market,” Ivins-Downes said.
IOL Property