Cape Town, 28 January 2008: According to a number of retirement specialists, there is a critical shortage of retirement accommodation emerging in the Western Cape. There are a number of factors contributing to this problem including increased life expectancy and a trend towards earlier retirement within the middle to higher income sectors.
A research survey conducted by the Central Statistical Service revealed that in 1995 the Western Cape, had the highest life expectancy of all the provinces in South Africa, at 67.7 years of age, the national average being 62.8 years of age. “Many people now have access to improved medical assistance and are able to adopt healthier lifestyles. These people are living longer lives. It is also a known fact that fewer babies are being born every year. This, coupled with the increasing life expectancy of certain sectors of the population, results in a higher percentage of our population being over the age of sixty,” says Billy Rauch, CEO of the Cape Peninsula Organisation for the Aged (CPOA).
There is also a trend amongst those from the higher income brackets to retire earlier. “In a new retirement development, the Schonenberg Retirement Village, we are seeing individuals and couples as young as 50 years of age looking to purchase retirement accommodation for immediate occupation. These people are seeking a change in lifestyle that only retirement villages like Schonenberg can offer – physical and financial security, healthcare facilities for later in life, social clubhouses, convenience and location,” says Russell Masters, project coordinator of Schonenberg Retirement Village, who has been involved in the development of a range of retirement villages in the Western Cape including Woodside Village, Silvermine Village and Oude Westhof Village in the northern suburbs. Billy Rauch concurs: “There is a massive shortage of secure retirement villages in the Western Cape and nationally. Many younger couples are realising that they need to plan their retirement early and are applying to these facilities in their forties and fifties. The emerging upper middle class in South Africa is also increasing the number of retirees that can afford premium retirement accommodation.”
As a consequence, there is an acutely increased need for retirement facilities, villages and complexes as more people enter the retirement market earlier.
According to a recent scarce skills study by the HSRC, which encompassed a range of highly skilled professions including managers, educators, nurses, doctors, scientists engineers, academics and computer-related professionals, between 0.5% and 1.7% of the workforce in each of these professions retired over a five year period from 2001 to 2006. This means that in the highly skilled professions covered by the study alone, nearly 43 000 people entered their retirement years over the five year period.
In the case of the more upmarket retirement facilities, waiting lists can be hundreds of names long and can lead to fifteen to twenty years of waiting. According to Billy Rauch, CPOA villages and complexes have waiting lists up to thirty years long. “It is vital that people realise the severity of the problem. If an individual or couple only begin to seek retirement accommodation at the age of 50, they will find themselves at a loose end until they turn 60 or 65,” says Masters.
Additionally, property prices in the retirement market are escalating. According to Masters, eighteen to twenty percent increases per annum are not uncommon in the retirement market. With the more upmarket facilities, this can mean anything from a R150 000 to R400 000 increase in price over one year.
“Having worked in the retirement industry since the early nineties, I’ve seen the shifts first hand. I now encourage potential buyers to purchase as soon as possible so that they can benefit from these price increases to avoid becoming priced out of the market. I also advise people to invest in the new developments as they are built, provided the developers are stable and reputable and that the village is managed in accordance with the Retirement Act. These new developments do not have waiting lists and usually offer a range of price options to suit various budgets,” explains Masters.
Masters, together with Rick Minchener hosts regular talks on retirement for those planning their own or their parents’ leisure years. For more information call (021) 852 0821 or 083 457 2007.