Those people who were looking to downscale when they retired around the time of the 2008 slump, but then had no immediate pressure to sell their properties at a “perceived discount” and very often had financial advisors telling them not to sell unless they achieved a certain price, are now six years older and are from a physical health point of view or inability to cope with their larger properties needing to downscale with more urgency than before, says Lanice Steward, managing director.
This is confirmed by John Loos’ FNB Property Barometer Estate Agents’ Survey for the first quarter of 2014, on the reasons for selling homes, which says “Downscaling due to life stage continues to be the strongest driver of residential sales” during this period.
Loos explains that this form of downscaling refers to those sellers who want a smaller home, usually either because they are getting older and cannot manage the larger property any longer, or their children have left home and they feel they do not need the extra space, said Steward.
“This is an international phenomenon, as we are now at the beginning of the era of the Baby Boomers, with those born between 1946 and 1964, now needing to retire. This increase in numbers needing to downscale has become a serious consideration,” said Steward.
The side effects of the increase in demand is that there will be an increasing pressure on the supply of retirement facilities, which are in short supply and many in South Africa have closed their books.
“The lesson to be learnt here is that if you are in that age group or near it, it is vitally important to plan well ahead so that when a change needs to take place, it will not put you under major pressure. Some people get caught with nowhere to go, and have to settle for accommodation that they are either unhappy with or is not in the area they would like to be in,” she said.
One of the biggest problems is that the increase in demand and short supply is making it exceptionally difficult for people in the middle to lower income brackets to find retirement accommodation that they can afford.
There is now an increasing trend, for parents who cannot afford to buy into a retirement village, to move to a dual living situation with their children, and so the need for dual living properties will increase and will start trending in a positive direction, said Steward.
“With the large numbers of people in the Boomer age bracket and people now living longer, it will create a large bubble of downscalers needing retirement homes, and many of these will in all likelihood also need full medical and care facilities for people with conditions such as Alzheimer’s (which is on the rise) or are physically frail. These facilities are very much in short supply,” she said.