Durban - When the children have flown the nest and the family home, with its empty bedrooms and costly upkeep, is too big for you, it may be tempting to stay put for a few more decades.
But doing so could turn your retirement dream of a sunny little cottage at the seaside or luxury estate overlooking the golf course into nothing more than that if you put off the decision to downscale for too long.
The shortage of reasonably priced retirement properties could mean you land up on a waiting list a decade long, or even worse, old age could put you at risk of failing the entrance medical examinations required by retirement complexes.
This is the advice of Durban retirement property expert Lesley McAlpine, author of the book Guide to Retirement, which provides retirees with a comprehensive list of retirement places.
McAlpine, recently retired herself, although not quite yet ready to scale down from her home in Durban’s Berea, knows a thing or two about the process after 14 years of interaction with clients and complexes.
According to McAlpine, the upsides of downscaling sooner rather than later are: “Security, security, security and financial, because people can no longer afford the maintenance of big gardens, a maid, the electricity and property rates.”
For others, it can be the loneliness of living alone in a flat during the day, while neighbours are out working, and then, said McAlpine, there were those who wanted to stay put because they were reluctant to give up their independence.
“But they don’t accept that their medical needs could change and that the beauty of a retirement place is that if you get sick at 2am in the morning you don’t have to call your son, you can just press a button and someone comes,” she said.
When is the perfect age to make the move?
“In your 60s or early 70s, because people are living longer and they are fitter. Decide to do it together as a couple and not when you have lost your partner and you have to pack up 40 years of memories on your own,” McAlpine said.
Once you have made the decision to hunt for a retirement home, you need to decide whether you want – and can afford – a place in an estate with hotel facilities, or whether you want a cottage or flat that allows self-catering.
The future need for frail care is another important consideration when making the move. And of course, there is also the option to rent.
According to McAlpine, Durban and Cape Town have far more retirement complexes than Johannesburg, but there are also many retirees who move to the coast.
Upmarket retirement complexes in Durban include the shareblock Caister Lodge and sectional title complex Garden Grove, where residents enjoy hotel services for higher levies than one would pay in self-catering accommodation.
According to estate agent Lyn Tayfield, a studio flat at Caister Lodge sells for between R400 000 and R600 000, while one-bedroom flats range from R700 000 to R950 000 and two-bedroomed flats from R1.2 million to R2.2m.
“Prices are dependent on the condition, the position in the building, size and views,” Tayfield said.
Three compulsory meals are provided daily for a levy of R3 325 plus a levy for the flat, which ranges from R3 125 to R9 400. Frail care ranges from R12 000 to R15 000 a month, depending on the room.
“Everyone over 60 can come in – we don’t put an upper age limit on letting people in, although we do a medical to check if the person is capable of looking after themselves,” said Caister Lodge general manager Brett Griffiths.
Estage agent Erika Rivaland, who markets Garden Grove’s 150 suites, said prices range from R300 000 to R450 000 for a bed-sitter to between R450 000 and R1.1m for a one-bedroom flat. Two-bedroom flats range from R800 000 to R1.9m. Levies range from R3 000 to R7 000 a month and there is a compulsory R1 300 lunch levy, while breakfast and dinner are optional. The lower age limit is 55.
Rivaland said complexes with hotel facilities provided security for the elderly and stress-free living because there was no need to shop and plan meals.
“When people are looking for retirement they often go to freestanding cottages, which don’t cater for their needs as they get older because the dining rooms are far away from their rooms,” Rivaland said.
“If you are in your early 60s go to a cottage, but if you are looking for security and don’t want another move you must look at the bigger picture where the frail care belongs to the establishment and is not outsourced.”
She also warned retirees to watch out for developments that promised frail care facilities that later didn’t materialise.
However, cottages remain a popular option for retirees. The life rights Mildene Park Retirement Village in Durban North, for example, has a 14-year waiting list.
Glenhaven Retirement Village is a shareblock in Glenwood that offers studio, one- and two-bedroom units ranging from R400 000 to R600 000 with levies ranging from R1 200 to R1 800 a month.
Mark McAlpine, who markets Association for the Aged properties, said there was a huge demand for reasonably priced properties under R800 000.
Tafta buildings, like Robert Storm House in Morningside, have life rights studio flats for R350 000 and one-bedroom flats for R750 000, and Tafta Park in Bellair offers one and two bedroom semi-detached cottages from R415 000 to R560 000. If you buy into a Tafta development you will be able to use one of its frail care units, at additional cost, on the Berea or in Umbilo.
Bill Buchanan in Morningside offers rental flats and life rights flats and cottages ranging from R285 000 to R1.1m. The levies range from R490 to R930 a month, while rented studio flats go for around R1 000 a month.
However, it’s in this middle to lower end of the market that finding an affordable place could be a problem, said Paul Rosenbrock, a director of the South African Association of Retired Persons.
And because people were living longer, Rosenbrock said, this resulted in further affordability issues.
“There is a massive shortage especially in the lower price range. The higher up the financial triangle you are the easier it is to sort yourself out. But in the lower end, incomewise, people are not able to come right,” Rosenbrock said.
“We get a lot of people coming to us regularly with financial problems. We have people who have been on retirement for a long time and they find that inflation has caught up with them. They thought they were going to make it and now they are not.”
John Brown (not his real name) has been married 45 years, retired 15 years ago and gets a pension of R4 800 a month. His medical fund contributions are R3 500 and with what’s left he has to buy electricity, pay rent and buy food.
“And that is not even the bottom of the market where some people have got nothing because they did nothing to take care of themselves and there are others who got taken for a ride in a financial scheme,”said Rosenbrock.
“Buying is impossible at the lower end and there is a huge shortage of lower-end rentals. Friendly societies like churches play a tremendous role in this regard.”
Even if a couple could afford to buy into a complex for a levy of R2 000 a month, if they needed to move to the frail care facility it would cost them more, Rosenbrock said. This could range from R7 000 to R20 000 a month.
“They would have to provide for that over and above their normal budget and there is no way the average person can provide for that when his interest is buying him less all the time. It’s a tragic situation.” - Independent on Saturday
Types of ownership
Share block scheme:
This provides the owners of shares in a company with the right of occupation to certain portions of a building. The company owns the building and shares are allocated into share blocks. The share block resident therefore owns shares in a company. Minimal costs are involved.
These rights give one the right to occupy a particular cottage or apartment for the rest of one’s life, and fall under the Housing Development Scheme for Retired Persons Act. No legal costs are involved.
Registration of the unit is done through the deeds office by a conveyancer and fairly substantial costs are involved, including transfer duty and conveyancing costs.
Source: Guide to Retirement Places by Lesley McAlpine