Fast For­ward

Finweek English Edition - - INSIGHT - Kris­tia van Heer­den & Marc Ash­ton

project will cost R33.5m, or R7 444 per square me­tre.

This idea sounds good, but will there be suf­fi­cient de­mand for prop­er­ties of this na­ture con­sid­er­ing the cur­rent strain on the res­i­den­tial prop­erty mar­ket?

Prop­erty spe­cial­ists RE/MAX re­cently re­leased an in­ter­est­ing report stat­ing that prop­erty in­vestors in the re­tail space should stop fo­cus­ing on Gen­er­a­tion X (31-45-year-olds) and start look­ing at ways to tap into Gen­er­a­tion Y, which are those presently aged be­tween 16 and 30. Adrian Goslett, CEO of RE/MAX of South­ern Africa, says that while Gen­er­a­tion X buy­ers ac­count for ap­prox­i­mately 18.74m of lo­cal con­sumers, Gen­er­a­tion Y ac­count for a much larger de­mo­graphic of the pop­u­la­tion, mak­ing up around 28.4m peo­ple.

Ac­cord­ing to the First Na­tional Bank Prop­erty Barom­e­ter, first-time buy­ers were around 23% of the to­tal buy­ing ac­tiv­ity in both 2011 and 2012. This has in­creased from 15% in 2008 and the trend is ex­pected to con­tinue as the eco­nomic re­cov­ery trans­lates into more jobs.

If you’re an in­vestor who en­joys the prop­erty sec­tor, it makes sense to get your head around this con­cept of re­pur­pos­ing and to start ex­plor­ing the en­trylevel prop­erty op­por­tu­ni­ties aimed at Gen Y.

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