FNB’s latest property barometer shows the sectional title market and its price growth remains stronger than that of full-title
Sectional title properties remain more popular than freestanding homes, but if price growth rates are anything to go by, bigger properties are becoming more popular.
FNB’s latest property barometer shows the sectional title market and its price growth remains stronger than that of full-title, but prices of full-title properties accelerated more last year. The pattern of smaller-sized units outperforming larger ones is therefore becoming “less clear”, says FNB’s John Loos.
Sub-segment stats are also showing a preference for bigger homes.
“In the full-title segment, the smallest average-sized segment – two bedrooms and less – has shown the slowest growth in the main full-title sub-segments, while in the sectional-title segment, the mid-sized two-bedroom sub-segment has been the only one showing average house price growth acceleration.”
Explaining further, he says: “It may be that, after some years of smaller-sized sub-segments outperforming the larger ones, larger-sized homes are now beginning to offer relatively better value for money.”
Although FNB’s statistics show that in the fourth quarter of 2017 sectional-title property prices rose by 5.18% year-on-year, while full-title prices rose by only 3.95%, the full-title increase was 0.73% more than the first quarter year-on-year growth rate. This is in comparison to the sectional-title rise which was only 0.22% higher.
The price growth gap between the two segments was 26.6% at the end of 2013, but by the end of last year, the gap had closed to 22.2%.
Within the sectional-title segment, smaller was still better, with the “less than two-bedroom” segment seeing the strongest price inflation. In the full-title segment, three-bedroom homes saw the highest average price growth.