As the economy shifts along with priorities, more and more people are considering sectional title properties
A look at residential property buying trends over the last few years shows something surprising: a move away from the white picket fence dream of a large house with a large garden, towards something smaller, denser and closer to the neighbours.
There has been a marked increase in the number of people purchasing smaller, sectional title properties, particularly in developments – and especially among first-time and younger buyers. A steady increase in first-time buyers since 2009 has meant that those who are financially limited are driving a lot of the demand for sectional title units. “Overall demand for sectional title units has risen by about 7% year on year, with the increase among first-time buyers around 6%,” says Simon Bray, CEO of Private Property. “Interestingly, sectional title has also been outperforming freehold property in terms of price growth over the last few years.”
The reasons are both economic and social. Security is a big factor for many: living in close proximity to neighbours and in a more communal environment is perceived to be more secure than living on a freehold property. Affordability is a factor: sectional title units are both cheaper to buy (especially if new, as there are no transfer costs) and cheaper to maintain due to their size.
Convenience also comes into play, as new developments are usually close to business hubs, amenities or transport links. While many sectional title properties are found in high-cost, high-density areas such as Sandton, Cape Town’s city bowl and uMhlanga, there are also less expensive units not as central but still close to public transport links such as the Gautrain or major highways.
The current economic environment is also a key influencer. “People have less money but still want to own their own homes, so smaller properties – that require smaller deposits – are attractive,” says Bray. In the midst of this interest rate hiking cycle, buyers are also wary of overextending themselves, so are opting for homes that are cheaper to maintain.
Words: Bridget McNulty
