Plans for miniature living units will give young buyers a chance to get onto the property ladder in otherwise unaffordable and land-poor Cape Town.
Is middle-class South Africa ready for micro apartments?
Property developers AJ Property Holdings and the Power Group think they are. Following approval of the site development plan, expected shortly, the developers will launch high-end micro flats on to the property scene with units starting at 21m² and going up to 48m². They’re decked out with space-savvy products, are in Woodstock, just five minutes from the CBD, and prices start well under R1 million.
Retail space below dwelling units promises to offer residents meeting and eating spots, laundromats, a pharmacy, braai areas, entertainment and anything else you can’t fit into such a small space.
Middle-class South Africans, especially Capetonians, have been getting used to smaller living spaces, content to forego some room for the convenience of living close to town.
Semigrants from Gauteng, who have been a major part in making the Cape Town market more buoyant than others, know they will have to downsize when they move here because the bang for their buck is way lower in the area.
Cape Town is a tough province for first-time home buyers, lagging far behind Gauteng which leads the pack with affordable homes. It is almost impossible for youngsters to get a foot in the door, especially close to the CBD, with only about 13% of all buyers here being first-timers.
FNB economist John Loos says the Western Cape’s strong housing market run has meant aspiring young buyers battle to afford homes here.Rob Steffanutto, group managing director at Dogon Property Group, who will be marketing the micro units, says: “It is becoming more difficult for the ‘average’ Capetonian to get into the market. You can have a job and just not afford to live close to the city.”
Properties for R1m or under are non-existent in the CBD and surrounds. Estate agents say they haven’t sold anything for that price in these areas for almost a year.
With affordability and space such an issue, Steffanutto believes developers will need to start moving away from what they think people need, and look into alternatives such as micro units for single person households.
These super snug, compact and affordable flats could be a solution to the growing demand from millennials to be closer to the CBD and their jobs, says Steffanutto.
Internationally, trends in big cities where affordability and housing shortages are an issue, show millennials are willing to trade space for a vibrant, convenient location and the opportunity to live on their own. They see a flat as less a place to linger and more somewhere to bed down.
Micro apartments, sometimes just 21m², seem ideal for property entrants who live alone and haven’t yet accumulated many possessions; who can afford the bond; and who spend most of their time at work or socialising out of their apartment, says Grant Gillis, chief executive of Delta International Design Company, the interior designer and planner of the micro units. (See sidebar)
“What we are selling isn’t just an apartment but a lifestyle. To work these buildings have to be alive. We need people living in the units, forming a community within the building,” says Gillis. This is partly why developers are not targeting investors but instead want to sell directly to people who will be living in the units
“Micro units work because the demographic that chooses to live in such a space uses the community spaces within the building and the city itself as their living room,” says Steffanutto.
“How often do people use a dining room or even a second room? When one looks at retail spaces these days their designs look like living rooms with couches and spaces to chill. They are offering alternate spaces for people to relax, away from home, because this is where the market is moving.”
Neil Gardner, development co-ordinator for the project and Gardner Property Solutions chief executive, predicts “in future micro units will be one of the only ways youngsters will get a foot on the property ladder in a city like Cape Town”.
“It is not for every city, but it will work in Cape Town.”
Gardner has been known for spotting a trend before it becomes a trend. He was involved in the conversion of the Old Mutual building in the CBD into residential apartments (Mutual Heights) at a time few people wanted to live in the city centre. “I predict what happened in the city with office conversions will happen with micro units.
“We will be rolling back the clock to that time when we did the first Old Mutual apartments when people were sceptical about buying in town, but those who took the opportunity are benefiting today.”
Gardner specialises in the Urban Development Zone areas of Cape Town, which the new development falls under.
Louis Karol Architects who were involved in the Mutual Heights project are also part of this new project as design architects and lead the professional team as principle architect.
The development itself will be rich in amenities.
The CCID for the area will also take space in the retail area, meaning security will be top of mind, says Gardner.
Residents will be able to walk out of their apartment into a vibrant retail space below and a bustling neighbourhood outside. This suits those who want to live, work, and play in the heart (or as close as you can get) of the city.
Internationally major cities short of housing such as San Francisco, Los Angeles, New York and Seattle in the US and Melbourne and Sydney in Australia are rushing to build amenities-rich micro-units to attract millennial and give them an option of living in an area they would otherwise not be able to afford. Overseas many complexes housing these micro-apartments boast communal spaces that include rooftop gardens, pools, fitness centres and lounges.
Albert Lourens, managing director of AJ Property Holdings, says another use for micro units is as crash pads for those who have bigger homes out of the CBD but need to be in town a few days a week for work.
Not every micro unit will come with parking.
“Many people are ditching private transport for minibus taxis, buses, bicycle taxis and services such as Uber and their own feet. It was important for us to find a piece of land on major transit routes, and we have done this,” says Lourens.
With a city already heavily burdened by traffic, such a development encourages shared or public modes of transport.
But will buyers be able to profit from selling their units?Are micro units a huge untapped market or a niche trend?
These questions still need to be answered in the South African context. But if international trends are anything to go by, the answer is yes.