As a new generation of retirees emerge, the retirement living property market has begun to find new ways of catering to the needs and lifestyles of retirees looking to settle down in comfort and security. 

One of the key trends coming to the fore is that of off-plan property developments, striving to provide retirees with secure, community-based property investments that carry all the benefits of homeownership. 

Gus van der Spek, Director of AVIEW and retirement lifestyle estate Wytham Estate, indicates that one of the major benefits is that of “choice”.  

“Purchasing property off-plan for retirement purposes gives one the freedom of choice. Here, retirees can choose the position of their home, the location, the size and even some of the finishes. Ultimately, you get to choose where you want to be and how you want to live.”

What is an off-plan property? 

Off-plan properties are essentially homes within housing developments that are sold to buyers prior to construction. Purchasing a home that does not yet exist might scare away some buyers, but many retirees who have invested in off-plan properties are reaping the benefits. 

Van der Spek outlines the added benefits of off-plan retirement properties as follows: 

Financing 

Most developers opt for life rights as their funding model of choice when developing a retirement lifestyle estate. “Simply put, life rights buys you the right to live in a home in a retirement facility and gives the holder of the right the security of tenure for the rest of their life,” he explains.

“Once a buyer elects to purchase (or fund) a property, they will need to either put down a 10% deposit with bank guarantees or a 30% deposit without guarantees. Deposits are kept in an interest-bearsing account and the interest is paid to the retiree (in full) upon transfer. It’s important to make sure that the deposit is kept with a credible conveyancing attorney,” says van der Spek. 

As the current state of the housing market remains a challenge, van der Spek adds that rather than having to sell their homes to release equity upfront, developers can take the retirees’ share portfolios into consideration as collateral. “This way, the seller has more time and can sell when they are ready to.” 

Reduced cost of living 

Another financial benefit of purchasing property off-plan and through life rights is that retirees are far less likely to incur hidden costs or special levies. 

“The Housing Development Schemes for Retirement Persons Act (HDSRPA) requires developers of a life rights village to produce a transparent statement declaring how levies will be calculated, as well as a two-year projection of what levies will be. This is a big help to occupants, who can plan their finances accordingly”, explains van der Spek.

Retirees living in developments geared towards retirement living save on maintenance costs owing to the responsibility development managers take for upkeep. 

“The developers are committed to maintaining the conditions of the unit, the facilities, and the village because the ongoing perceived value is directly related to the condition of the estate,” he adds.

Other cost savings 

“Purchasing a property off-plan and through life rights ensures that the retiree incurs no transfer costs or VAT expenses (15%), including bond registration. This offers a substantial cost savings, especially when buying a multi-million-rand unit where transfer costs could amount to hundreds of thousands of Rands on top of the purchase price.”

Governed by the HDSRP Act 65 of 1988, which states that life right holders are entitled to the same rights they would have if they had entered in a registered long-term property lease, retirees only pay in full once the development is completed and the developer only receives the payment once the keys are handed over. 

“This ensures a transparent, mutually beneficial transaction,” says van der Spek. 

Lifestyle and independence

Modern retirement property developments boast entertainment and healthcare facilities that allow retirees to maintain their lifestyles while having access to medical facilities as they grow older. 

“Living in a modern village with extensive on-site facilities and access to healthcare is of major benefit to retirees and relieves a lot of stress that would be a part of living in a freehold property,” says van der Spek.

By purchasing property off-plan, buyers secure for themselves a future retirement that supports their need to be active and social, while being provided with advanced medical care. 

Flexibility and customisation

One of the most common misconceptions of off-plan property purchase is that each buyer will be provided with identical homes once the construction of the development has come to completion. The direct opposite is the case, van der Spek points out, given that the off-plan purchase process allows buyers to make final decisions on design qualities and interior finishes. 

“Retirees are then able to relocate to a home that is truly theirs when they reach their time to retire, giving them a unique living experience that is both secure and customised,” he concludes.