South Africa’s formal retirement property market, accommodating 44 000 households, represents a small but significant segment of the country’s housing landscape. While a majority of seniors currently reside in homes purchased earlier in life, the demand for purpose-built retirement communities is on the rise. This trend is driven by a growing senior population, changing lifestyle preferences, and increasing financial security among older adults.
Hayley Ivins-Downes, Managing Executive Real Estate at Lightstone, a provider of comprehensive data, analytics and systems on property, automotive and business assets, says the data shows that, of the country’s 5.45m residential properties (excluding social housing), approximately one third is owned by >60yrs olds. A quarter of these owners bought their properties after they turned 60, and just 44 000 of these properties are in formal retirement villages, which suggests they are targeted at the upper end of the market.
Properties owned by >60
The pie chart shows how ownership of the >60 year olds is split between subsidised housing (1.3M), non-retirement housing (1.5M), and formally registered commercial retirement homes (44 000).
Lightstone has identified around 650 retirement complexes in South Africa – either Estates or Sectional Schemes – which use words like “retirement”, “old age”, “bejaard”, “aged”, or “outehuis” in their name.
Some 350 of the complexes are made up of properties registered at the Deeds Office (a total of 44k units), while around 300 entities are registered as one property at the Deeds Office but owned by, or allocated to, social services who manage units.
At most, these 650 entities account for less than an estimated 100 000 units and no more than 125 000 individuals, a small proportion of the over five million people who are 60 years of age or older.
Formally registered retirement properties
“The 350 complexes containing units registered at the Deeds Office account for 44 000 properties, of which 33 000 are privately owned and 11 000 are owned by companies or trusts. These properties house anything between 44 000 to 88 000 people, assuming one or two people live in each property. More than half of the properties are valued at more than R1.5m,” Ivins-Downes added.
Value of properties
Ivins-Downes says, “The data clearly shows that while many South Africans over 60 own their homes, there’s a significant gap in the availability of formal retirement housing options. While we have identified around 650 retirement complexes, these only accommodate a small percentage of the senior population. This highlights the need for more diverse and accessible retirement housing solutions, particularly in the affordable segment.”
Additionally, approximately 13% of the stock was developed after 2020, and just more than 25% were built before 2000, with the balance being built in between (see graph below).
Age of stock
Some 35%, or 15 000 properties, are in Estates (gated communities with a shared access/exit gate), and 65%, or 29 000, are in Sectional Schemes.
Sales over the last five years
A total of R29 billion has been spent on more than 15 000 properties at an average price of R1.9m in retirement complexes over the past five years (see four tables below).
While sales have mostly occurred in Gauteng, Western Cape and KwaZulu-Natal, the Western Cape has had the highest average sales prices.
Highest sales volumes over the last five years
Highest average price over the last five years
Highest total sales value over the last five years
Non-retirement properties owned by >60yr olds
Ivins-Downes adds that the majority of the 1.5 million non-retirement properties owned by >60yrs olds, (which excludes subsidised units) are Freehold, followed by Sectional Schemes and then Estates. “Interestingly, though, buyers who were 60 or older when they bought their retirement homes opted for Estates or Sectional Schemes in greater numbers, while those who bought when they were younger preferred Freehold properties, reflecting the overall pattern in the property market,” she said.
Where do >60yr olds choose to live?
Sales volumes and average prices paid have been consistent over the past 10 years, other than the Covid fall in 2020.
Transactions by >60yr olds
The proportion of sales to over >60yrs olds, and the average price they paid relative to the market, can be seen in the graph below.
Proportion of sales by >60 yrs and relative value
A provincial comparison of retirement properties vs non-retirement properties owned by people over 60
The graph below shows the average value of stock owned by >60yrs olds. It shows the average value of properties within retirement villages is consistently higher than the value of homes outside retirement villages, and it also shows the limited number of homes within these retirement entities. The graph also demonstrates that the Western Cape leads the way in terms of retirement properties followed by Limpopo, Gauteng and KwaZulu-Natal.
Provincial view of >60 yr olds in formal properties
About Lightstone:
Lightstone is a provider of comprehensive data, analytics and systems on property, automotive and business assets. Lightstone has access to unique and proprietary data sets which allow it to build sophisticated analytics and spatial models to deploy various technologies to a range of industries. Our analytical, business and industry expertise are paired with our technical excellence to guide clients in managing risk and making business critical decisions. For more information, please visit: www.lightstone.co.za.
