MAIN IMAGE: Alexa Horne – managing director of DG Properties, Grant Smee – managing director of Only Realty Property Group, Zydah Manuel – portfolio manager at Absa Home Loans, and Julian Pick – national manager: credit lending at Absa Home Loans.
Senior writer
In 2022, Stats SA estimated that 32,2% of the population live in a multigenerational home, sparked largely by the cycle of interest rate hikes, an ageing population unable to care for themselves, cost-of-living increases, youth that are unable to afford to live elsewhere, rising high unemployment, and a means by which the average person is able to better manage a fast-paced lifestyle. These societal changes are significant drivers of the resurgence of multigenerational living, a practice that has been a part of SA for decades and is now growing in popularity.
Emergence of the Smart Family
Another angle to this trend is the emergence of the Smart Family. These are those looking to cater to their growing needs of privacy, accessibility to suburb facilities, and other comfort cushions, particularly those of sustainable methods of living, making, for example, the costs of going completely off-grid more affordable.
Alexa Horne, managing director of DG Properties, says that in the current market, the trend is largely towards elderly parents moving in with their adult children and adult children moving back to their parents’ homes. “This also applies to extended family such as aunts, uncles, cousins, etc., who, by sharing living expenses and pooling resources, allow multiple generations to make ends meet.
“There are obvious advantages beyond financial, not least being that ageing family members receive companionship, support, and care and can help their younger host generation with childcare, home maintenance, and consumable costs. However, we cannot discount the fact that many simply live together to maintain close ties and foster strong family bonds. Either way, multigenerational living contributes to the overall well-being, stability and happiness of the family.”
These cuddle cushions come from largely five specific factors: economic, whereby families share the financial burden of homeownership from home loan repayments to utility costs, providing a sense of security and stability; shared child and elderly care and support; stronger family bonds through shared meals and the passing down of traditions across the generations; emotional support during times of crisis; and security, which deters potential intruders and ensures the safety of all living in the home, especially the most vulnerable, such as children and the elderly.
It may not be for everyone, but there are ways to acquire the same advantages, even if not under the same roof. Grant Smee, managing director of Only Realty Property Group, points out that even if some homeowners are disinclined to having other family members in the home, building additional dwellings on their property or converting unused external space to the so-called granny flat, offers some form of privacy for the benefit of all.
“Generally, multigenerational living is more popular in freestanding homes than estate. However, we are seeing an increasing trend of residential estates marketing themselves as the ideal site for multigenerational living, offering close proximity to family members who can offer support with child and elderly care needs while still maintaining independence through separate, self-contained homes.
“Estates like Steyn City and Val de Vie have carved out a unique niche by catering specifically to the different generations: retirement units for grandparents, large freestanding homes for parents and luxury apartments for young adults, all in one secure gated community,” says Smee.
Cape Town paves the way for multigenerational living
In fact, Smee points out; this has become so prolific that “the City of Cape Town, in 2020, went so far as to amend a municipal bylaw to give homeowners the automatic right to build up to three dwellings on their land on all properties in the city zoned as SR1.
Horne cites Wynberg Upper, Rosebank, Rondebosch, Fresnaye, and Bantry Bay, where houses on sale range between R4 and R35 Million. “These are expansive properties that are ideal for multigenerational living, catering for off-road parking/garaging for multiple vehicles, private gardens and courtyards, and outbuildings or staff accommodation that can be adapted for children or parents.”
Make multigenerational living work by creating an SPV
One aspect of multigenerational living concerns those living together, who will have no say in how the property is managed and whether they can secure any financial contribution they make to it. This has been catered for in SA through the setting up of a trust, or legal entity, that can have up to 12 trustees. These are known as special-purpose vehicles (SPVs). A minimum of three trustees can then buy a property jointly under certain conditions and restrictions.
Absa Home Loans’ Zydah Manuel and Julian Pick say that when agents are confronted with a potential buyer who may be disappointed at not being prequalified for a particular property, they could recommend the creation of an SPV. “All the SPV participants are credit checked and analysed for affordability, and they become jointly and severally liable for the monthly home loan repayments, taxes, and all other associated legal and administrative fees. This will require the services of an attorney who will draw up the partnership agreement, specifying how shares are distributed and any conditions should the partnership need to be dissolved.”
“If three or fewer members of a family wish to purchase a property together, they can do so jointly in their individual names,” said Manuel and Pick, who also confirm that although only one debit order transaction can be loaded for such a home loan repayment, other participants can make further deposits into the home loan account to build up equity excess. This provides security that no single contributor can withdraw excess without consent from all.”
Agents can play a crucial role in steering potential buyers towards the purchase of a multigenerational home, especially this year before the expected positive shift from a buyer’s to a seller’s market. There are strong indicators that investors, be those first-time or seasoned buyers, are looking for bargains, and more so once the interest rate is lowered, which will likely see home values begin to rise again. Spinning a purchase as a multigenerational home is a smart new marketing tool.
