Cape Town – Sectional title units are becoming increasingly popular, in South Africa, according to Dr Andrew Golding, CEO of the Pam Golding Property (PGP) group.
He pointed out that, while freehold price inflation has been slowing, sectional title price inflation continues to gather momentum.
South African developers are responding to the change in demand, with sectional title units rising from 10.9% of total plans passed in early 2000 to 38% in early 2015.
“Not only is the South Africa population growing by an additional 800 000 people each year, but a gradual decline in the number of people per household – from four per household in 1996 to just 3.4 people in 2011 – means that the number of households is increasing at an even faster pace than the population,” explained Golding.
“This is reinforcing the trend towards densification and smaller units.”
With transport costs and traffic congestion on the increase, residents in Johannesburg and Pretoria, for instance, are looking to live close to economic nodes and transport corridors that allow easy access to the workplace and educational institutions.
This is resulting in rapid residential densification within growth nodes such as Rosebank, Midrand and Fourways.
In addition, Johannesburg itself and Braamfontein are undergoing massive redevelopment while the growth of Sandton continues unabated.
New residential apartment developments in and around central Sandton are currently selling for approximately R35 000 up to R60 000 per square metre.
Midrand has doubled its number of residential properties, in addition to increasing its number of sectional title properties by 550% since 2000, according to property analyst Lightstone.
In Tshwane an interesting new trend for Golding is the launch of new residential developments specifically to cater for the rental market.
This is coupled with the growing emergence of the Old East, in areas such as Brooklyn, where developers are buying up and demolishing old houses in order to create new apartment buildings.