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The evolution of the retirement community industry, coupled with a steady recovery of the property market since 2008, has seen a dramatic increase in the number of new developments on offer for retirees. While this is a good thing, it also makes choosing a retirement option much more difficult.
Compounding the issue, says Rob Jones of Shire Retirement Properties, an independent consultancy, is the fact that “while we have some industry-related laws, they are incomplete and outdated. There’s no government participation in the industry to speak of and, as a result, there’s hardly any regulatory pressure on industry participants to improve matters. Almost all attempts to address concerns in the industry have come from people who are already retired, and who sometimes unfortunately find themselves at the mercy of participants in an industry with very little cohesion, few common standards of operation and many different codes of practice.”
Obviously, potential homeowners want to buy from a developer with a good reputation and track record – but, because there are no regulations governing retirement estate developers, there is no benchmark against which to evaluate developers. They aren’t vetted by any governing body, nor are the professionals who develop the infrastructure. So mistakes can be made and, unfortunately, “it’s inevitably the retirees that bear the brunt,” says Rob.
Developing a successful and sustainable retirement estate is a science. There are so many variables that must be taken into consideration in order to ensure financial security for both the homeowner and the estate developer. And developers also need a clear understanding of the requirements of a retirement community. Many needs are the same as those for other gated communities, but for older people there are also additional essential services.
A well-planned retirement estate with clear rules and a transparent approach to levies and other financial matters is attractive and enjoys a very low turnover of owners and residents. And the longer people remain in estates, the more benefits accrue to them in terms of levy stabilisation – if such practices are incorporated in the estate rules – and community and social benefits. A financially secure estate is one that maintains a surplus in relation to operational costs and has a healthy and growing reserve fund to cater for times of high inflation, necessary capital expenditure or unforeseen expenses that may result from disasters like flood or fire.
Shire Retirement Properties is an independent retirement property and retirement services consultancy based in the Western Cape Province of South Africa. The company focuses exclusively on providing a unique set of services to those interested in developing, purchasing or optimising quality South African retirement properties.
