Advice and Opinion

Retirement; the fastest growing residential investment segment

An artist's impression of the view of the pool and clubhouse at Shoreline Sibaya in Kwa-Zulu Natal.
An artist's impression of the view of the pool and clubhouse at Shoreline Sibaya in Kwa-Zulu Natal.

Retirement is the fastest growing residential investment segment within the country at present. Stats collected from the Retire KZN initiative reveal that at present, in KwaZulu-Natal alone, there is a 32% demand from people looking into retirement property as an investment prospect.

The growing interest in retirement property as an investment opportunity is a result of a few fundamental factors, namely location, demand for the product, capital appreciation and rental returns.

“KwaZulu-Natal is becoming South Africa’s number one retirement destination due to its competitive property prices and relaxed lifestyle, safe and beautiful location options, warm climate and world-class facilities and amenities on offer,” shares Wicus Jacobs, Director of Carmel Properties.

One such retirement development that is ideally suited to the investor market is Shoreline Sibaya, situated in the acclaimed Sibaya Coastal Precinct. This pet-friendly retirement estate, developed by Carmel Properties, features modern single-level sectional title apartments, that consist of 1, 2 and 3-bedroom options, with an array of care services provided by the onsite MyCare Centre, which will be built within phase 1.

Sibaya Coastal Precinct is KwaZulu-Natal’s premium residential node, and offers security and the benefit of being positioned close to the sea, forest and convenient retail centres. Shoreline Sibaya also neighbours Signature Sibaya Estate, who offer KwaZulu-Natal’s most expensive freehold stands.

Location is a huge component when it comes to investing in property, and retirement property is no different. With the prized location comes a better capital appreciation expectancy. Other residential developments within the Sibaya Coastal Precinct are expected to enjoy a minimum of 30% capital appreciation between securing a unit and subsequent transfer. This capital appreciation is seen to be further enhanced in the case of an off-plan retirement estate, based on the demand and the fact that Shoreline Sibaya is the only retirement estate in this node.

“Off-plan developments like Shoreline Sibaya experience capital appreciation between securing the purchase upfront (with a 10% deposit), and the transfer of the unit on completion. In most cases, the value and demand for retirement property escalates once retirees see the development is complete,” says Jacobs.

“Furthermore, when buying off-plan you benefit from not having to pay the transfer duty, which is a huge investment incentive. While those purchasing within Shoreline Sibaya have the additional benefit of not having to pay a levy stabilisation fee, as this is a cost we have taken on,” continues Jacobs.

Lastly, with the Baby Boomer generation living between 10 – 25 years longer than their parents, we are seeing an exponential increase in retirement property demand. For the elderly, retirement purchasing is not always easy, which also creates a strong rental need. Retirement investors are seeing larger and more reliable rental yields, than in traditional residential developments.

“As you can see, retirement property is taking property investment to the next level”.