In today’s fast-paced, and technology-driven world, the importance of convenience cannot be overstated.
Convenience is a crucial factor in the decision-making process when it comes to choosing where to work, and it is even more of a concern when it comes to buying or renting a home.
One of South Africa’s leading real estate firms Pam Golding has analysed its recent transaction history and found a prevalent trend amongst South Africa’ young demographic that prefers smaller, more conveniently-located living spaces over larger plots in the suburbs.
Pam Golding Property Group’s Chief Executive Dr Andrew Golding believes that the smaller living spaces (which enjoy reduced monthly utilities and maintenance costs) have resulted in an increasing demand for sectional title units that are located in conveniently situated and accessible apartment complexes.
Dr Golding states: “With South Africa’s young demographic profile, it is hardly surprising that there is a growing demand for sectional title living, not only from first-time and young buyers opting for apartment living but from homeowners across all ages who are seeking smaller homes in more convenient locations.
“This is borne out by the fact that in Cape Town‘s city centre, the average size of apartments sold decreased from approximately 82sqm in 2013 to 77.6sqm in 2018 (Source: Cape Town Central Improvement District). While sacrificing space, and apart from the benefits of lower operating and maintenance costs and good security, a smaller apartment in a convenient location such as this enables a reduction in the daily commute to the workplace as well as on foot access to a range of facilities such as restaurants, coffee shops, gyms and shopping, among others. Indeed, some new developments in key, centrally positioned hubs in various regions around the country offer a host of such facilities on-site, further enhancing the ‘live, work, play’ appeal of the location.”
According to figures produced by Statistics SA, in 2010 only 13.5% of all new residential buildings were sectional title properties; compared to 2019 where the figure has risen to 57.7%, this is a remarkable rise in under a decade.
Sandra Gordon, a Senior Research Analyst for Pam Golding Properties, notes that the sectional title trend is: “[more] pronounced in Gauteng province, which dominates the sectional title market, accounting for just over half of all apartments sold each year.”
Sandra goes on to add: “We know that half of all young South Africans purchase their first home in Gauteng – hence the demand for sectional title units. Here, according to Lightstone, sectional title sales have risen from an average of 27.4 per cent of total unit sales in 2010 to 33.9% in 2018.
“The shift developers are making towards building new sectional title homes is highlighted by the fact that 60.1 per cent of all new homes sold in Johannesburg last year were sectional title properties, while 45.4 per cent of all sales – both new and repeat – were sectional title units.
“Affordability is a further factor favouring sectional title. For example, of the 12 603 sectional title properties sold in Johannesburg last year, 45 per cent were priced under R800 000 while a further 40.1 per cent were priced between R800 000 and R1.5 million, and only 191 units (1.5 per cent of the total), were sold for more than R3 million.” asserts Sandra.
As shown in the image on the right], Cape Town has the highest percentage of sectional title units sold (over R3m) in 2018.
Moving down the valuation ladder, figures show that last year 34.5 per cent of the 6,520 sectional title properties sold in Cape Town were priced between R800,000 and R1.5 million, while a further 31.9 per cent were priced under R800,000.
In Western Cape, sectional title sales rose from an average of 14.4 per cent in 2010 compared to 19.4 per cent of total sales in 2018.
Eastern Cape also experienced a similar percentage of total sales, randing from an average of 15.2 per cent in 2010 to 19.7 per cent last year.
To date, 24 per cent of all sales in East London (pictured above) have been sectional title units, while accounting for a staggering 47.9 per cent of all sales in Port Elizabeth (up from 20.9% in 2010 and 41.4% in 2018).
Featured Image: Antigua, The Waterclub (Cape Town) – Priced at R9.5m