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Demand for sectional title properties have exploded

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A growing demand for sectional title living, with buyers of all ages looking for smaller homes in more convenient locations.

Demand for sectional title homes has exploded in recent years and the trend continues to grow. Today’s fast-paced and busy lifestyle means convenience is a critical factor for buyers and tenants, while smaller living spaces also offer reduced monthly utilities and maintenance costs, says Andrew Golding, chief executive of the Pam Golding Property group.

With South Africa’s young demographic profile, it is “hardly surprising” there is growing demand for sectional title living, with buyers of all ages looking for smaller homes in more convenient locations.

Citing statistics from the Cape Town Central Improvement District, Golding says the average size of apartments sold in Cape Town’s city centre decreased from about 82m² in 2013 to 77.6m2 last year.

“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.

“Some developments in key, centrally positioned hubs in various regions around the country offer a host of such facilities, further enhancing the ‘live, work, play’ appeal of the location.”

In 2010, only 13.5% of all new residential buildings completed in the country were sectional title properties, says Sandra Gordon, senior research analyst for Pam Golding Properties.

By Q1 2019 this had risen to 57.7%. “In addition, new and repeat sectional title sales increased from 21.2% of total residential sales in the country in 2010 to close to 28% in late 2018.”

Gated estates with fewer luxury lock-up-and-go units is a growing trend in Cape Town’s southern suburbs as security-conscious buyers in the upper property market increasingly want a minimum-fuss lifestyle, says Trevor Weston-Green of Keller Williams Premier.

“There is a growing preference for luxury lock-up-and-go properties instead of traditional family homes with large grounds that require more maintenance.” 

The Re/Max National Housing Report for Q2 says that of the 65394 transfers during this period, a total of 31098 was freehold properties and 17034 sectional title units were sold.

Although, when compared to the first quarter of this year, these figures translate into a 12.2% increase in the number of freehold properties sold, Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa, says when compared to the figures in Q2 2018, the second quarter of this year experienced a 4.2% decrease year-on-year.

“Sectional titles, on the other hand, saw an 18.4% increase in the number of sales when compared to the sales figures of Q1 2019, and an 18% increase when compared to the sales figures of Q2 2018.

“These figures reflect the rising popularity of sectional title living and the increasing supply of these sorts of homes on the market.”

However, when it comes to house price growth, freehold titles still have the edge. Citing Lightstone data, Goslett says the current national median price of a freehold home has grown to R1.148million, which is a 14.3% increase on the median asking price for Q2 2018.

In comparison, the national median price of a sectional title grew by just 2.1% to R1.032m.


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