Search Property For Sale

WAY TO GO: Smaller has big benefits

Google+ Pinterest LinkedIn Tumblr +

There is rising demand for sectional title homes, but many still set on freeholds

Houses that stand proudly within white picket fences and surrounded by lush green lawns have always been the clichéd dream of the fairytale home. And while many may still aspire to this, trends suggest smaller is becoming increasingly better.

Rising costs of living, flexible lifestyles and safety and security concerns have seen the appeal of sectional title homes continue to grow while the demand for free-standing homes has “remained consistent”, says Richard Hardie, chief executive of Knight Frank Residential.
Furthermore, the supply of sectional title units is meeting this growing demand. Sectional title properties are more popular as they require less maintenance and fall under the management of a body corporate, he says, adding that, generally, security is also better. Of course, trends tend to differ between areas. 
“Atlantic seaboard and City Bowl have a greater demand for sectional title. In the southern suburbs and Hout Bay, there is a strong demand for full title. The latter areas have a greater make-up of families who look for a home with garden and pool.”
Many people have pets, which forces them to seek full tile properties, but Hardie says sectional title developments “are becoming more flexible” with pet-friendly policies.
Sectional title properties are also favoured for their more accessible pricing, says Jolene Alterskye, a Lew Geffen Sotheby’s International Realty area specialist in the City Bowl and Atlantic seaboard. Owners of such properties also have the benefit of communal facilities on offer, without the responsibility for the upkeep.
In most areas, particularly in the CBD, City Bowl and along the Atlantic seaboard strip, Alterskye says the demand for sectional title homes has “increased exponentially”. “As a result, a significant number of full title homes are being rezoned to allow for sectional title developments, which the City is encouraging due to growing density.”
The lack of pet-friendly sectional title options is, however, problematic, especially for people living alone and/or those who view their pets as family members. 
“Many sectional title schemes do not allow dogs, and this has become a critical issue for purchasers who may be living alone and want a pet companion,” Alterskye says.
“These people would never live in a house alone so apartment living is the only option. and they are then limited as to which block will allow their dog. A number of widowed elderly people cannot move from their big houses into an apartment because their pets would not be allowed. “A number of my sectional title sales are subject to their pet being accepted by the body corporate, which also puts the seller in limbo not knowing whether or not the sale will proceed.” 
Alterskye says the “perfect property blend” would be sectional title townhouses which have private gardens and are pet-friendly, yet still offer communal facilities and shared security and are managed by an agent or body corporate. Lightstone data shows there are approximately 6.7 million residential properties in South Africa. The make up of these is 83% freehold (5 560 000), 11.5% sectional title (770 500), and 6.5% estates (435 500).
Of the overall R5.3 trillion value, freehold homes account for R3.58tn while sectional title properties are valued at a combined R768.5 billion. Estate properties are valued at R943.4bn. These figures mean the average price of a sectional title property in South Africa is R997 400, while for a freehold home it is R643 800. The average value of an estate home, which could be sectional title or freehold, is R2.1m.

Moving from a big home frees time and money for new pursuits
FREEDOM Freehold homes offer benefits many do not want to leave behind. Picture: Supplied

Homeowners and tenants who are used to their privacy and big garden spaces may not fancy the idea of living in an apartment. Similarly, sectional title property owners and residents may be more than willing to give it up for the benefits of lock-up-and-go convenience and easier home maintenance.
At the end of the day, preferences differ from person to person, and both freehold and sectional title homes have their pros and cons. For many people, such as empty nesters, downsizing from a freehold to a sectional title property is not an easy choice, says Rudi Botha, chief executive of bond originator BetterBond, and the move could be something they are dreading.
“Even owners who have been planning their move for years can find it extremely difficult to start packing when the time finally arrives to do so.”
Empty nesters, in particular, also fear the move will entail a drastic change in lifestyle. But in addition to the usual benefits of sectional title living, Botha says a smaller, more modern home can free up time and money for other endeavours, such as hobbies, travel and study – or for some of those luxury features you’ve been promising yourself for years.
“You’ll also have the opportunity to choose a home with greater security if you wish, or maybe one that doesn’t have stairs and will be easier to get around as you get older.”
Richard Hardie of Knight Frank Residential says the biggest drawcards for sectional title are that owners form part of a body, maintenance is looked after by someone else, and there is usually good security.
The negative aspects include residents living close to other people with whom they may not always agree, or like, and having to pay special levies for unexpected maintenance or repairs. Living in a full title property, means you are free to do what you want in and around your home, you have privacy and you do not have to pay levies, Hardie says.
The cons are that heightened security is required and maintenance is at the owners own cost and their responsibility to administer, Hardie says. Renters prefer sectional title properties over freehold, with the TPN Residential Rental Gross Yield index indicating there is a higher demand for sectional title homes. 
In 2007 there was a dip in demand for this property type, but since then it has sharply risen, and continues to increase.  
Take responsible route with family pets
HOMES FOR PETS Many pet owners are forced to give up their pets when downsizing into sectional title properties. Picture: Supplied

Many family pets are suffering in the growing movement towards sectional title living, often being abandoned, handed over to new owners, or surrendered to animal shelters.
“It is a sad state of affairs and animals are often negatively affected by these circumstances,” says Meg Wilson, spokesperson for the National Council of Societies for the Prevention of Cruelty to Animals (NSPCA). Social media is often flooded with pleas for homes for family pets, and in many cases this is because of relocation into smaller properties or homes that do not allow animals.
“Unfortunately the sad reality in South Africa is that there are far more unwanted animals than there are good homes,” Wilson says. She says the animal welfare organisation is obligated by law to accept every animal that shows up on their doorsteps.
While many owners who surrender their pets to their local SPCA does so with the hope they will be adopted into loving homes, the reality is not always so simple. Wilson says while there is no time limit on how long animals are kept at the organisation, they are kept for the time period best suited to their welfare. 
“Some animals do not cope in kennel environments and begin to self-harm. In these cases, decisions are made for the best interest of the animal.” Some sectional title properties, and even granny flats, do, however, allow pets, which saves their owners from having to make heart-breaking decisions to give them up.
However, it is also common for these owners to offer their pets for adoption anyway, fearing a smaller home or garden may not be good for the animal. 
Asked whether this is the correct thought pattern, or whether the trauma of being separated from their humans is worse for a pet than adapting to a smaller home, Wilson says: “This is varies from person to person. If they have the time to play with and exercise their animal and exercise, keeping him or her would be in its best interest.”
For pet owners who decide to surrender their animals to the SPCA, she advises that they be honest about why they are surrendering the pet. “The SPCAs will not pass judgment but this will help in finding a new suitable home. Also provide information about the animal’s behaviour.”
Wilson urges pet owners to “be responsible” and surrender their pets to the SPCA rather than give them to people they do not know. “Offering pets ‘free to a good home’ makes them vulnerable to abuse.”  
Security of community
LOW MAINTENANCE: Sectional title living is becoming increasingly attractive to tenant. Picture: Anette Hallstrøm

Sectional title units are proving to be as attractive to tenants as they are to homeowners. TPN managing director Michelle Dickens says there has been a “big increase” in tenants downscaling to more affordable rental properties in the past five years. In 2013, 19% of tenants downsized compared to 31% today.
Similarly, 81% of tenants upgraded to more expeonyear since 2003, sectional title sales have been consistent over the same period. The figures show two-bedroom apartments are the most popular and experience the most demand.
Two-bedroom apartments account for 59.45% of all Western Cape sectional title sales, while one-bedroom and three-bedroom apartments account for 21% and 19% respectively.
Alexander says: “The property investor in Cape Town can have complete confidence in sectional title properties, particularly those priced between R1 million and R1.6m, and sited in the city’s northern suburbs.”nsive properties in 2013 whereas only 60% of tenants have had the means to upscale in 2018.
“The obvious driving factor behind downgrading for tenants in South Africa is affordability, but one can’t discount the importance of sectional title developments offering the security of community living and low maintenance.”
Confidence of investors
UPWARDS: Western Cape sectional title prices are higher than in other provinces. Picture: Anja Osenberg

Western Cape sectional title prices are, on average, about 20% higher than those in other provinces, says Rowan Alexander, director of Alexander Swart Property.

Referring to data from Lightstone, Alexander says despite a slow decrease in the buying of freehold property year-on-year since 2003, sectional title sales have been consistent over the same period. The figures show two-bedroom apartments are the most popular and experience the most demand.
Two-bedroom apartments account for 59.45% of all Western Cape sectional title sales, while one-bedroom and three-bedroom apartments account for 21% and 19% respectively.

Alexander says: “The property investor in Cape Town can have complete confidence in sectional title properties, particularly those priced between R1 million and R1.6m, and sited in the city’s northern suburbs.”
Plan ahead: Control timing
BOUNDARIES: Young people find it easier to adapt to downsizing changes. Picture: Hannah Busing

The younger you are when you make the move into a sectional title home, the easier the transition is likely to be, says BetterBond’s Rudi Botha.
“There is much less chance you will have to make a forced sale due to changed circumstances such as ill health, and a much greater chance you will make new friends and develop new interests in your new location.”
In addition, those who plan ahead and control the timing of their sale should be able to make the move when the market is in their favour.
“This may mean you pay more for your new home than you would in a softer market, but if you’re selling a more expensive property in the same market, you should come out well-ahead financially.”
Share.

About Author