Developers should seek new pastures in retirement villages

Developers who have been hard hit by the decline in demand for residential property would do well to focus fresh attention on the under-supplied retirement village market, particularly in the less traditional retiree areas.
 
Gerhard Kotzé, CEO of the ERA South Africa property group, says that while there remains an over-supply currently of conventional cluster and sectional title homes due to the recent recession, the shortage of retirement homes, particularly of more affordable units, remains acute.
 
“This is notwithstanding the facts that people are living longer and that there is considerable buying power in the retirees’ market.” 
 
He says the problems besetting the retirement village market are well documented and it’s common cause that waiting lists are lengthy, entry costs are high even under life rights purchase and that retirement village levies are often hefty.
 
“Clearly what is needed is a re-think by developers, municipalities, architects, building suppliers and other stakeholders in their approach to meeting the demand for retirement villages.
 
“One solution is to seek out suitable rural towns and capitalise on their quiet lifestyle, security, low development costs and ample land – as has already happened in places like Marquard in the Free State, Dundee in the KZN midlands, Naboomspruit (Mookgophong) in Limpopo, Bedford in the Eastern Cape, Stilbaai in the Western Cape and some Karoo towns.
 
“There is indeed a discernable if still far too limited trend in this respect, reflected in the emergence of attractive, affordable retirement village schemes in various parts of the country.”
 
Moreover, Kotzé says, there’s potential in innovative conversions and upgrades of the likes of defunct holiday resorts and mining villages which have the basis of infrastructure still solidly in place and which lend themselves to makeovers into inexpensive, perfectly acceptable retirement villages. 
 
“Further impetus for my thinking comes from the latest building statistics which underline the fact that residential building completions and new plans passed are still very epressed. 
 
“Indeed predictions by Absa and FNB are that 2010 will be another tough year for the residential building sector with a gradual improvement in the latter half of the year.Given this scenario it seems only logical to seek pastures new and retirement villages offer real possibilities in this respect.”
 
Issued by ERA South Africa
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