Sec­tional ti­tle prices show gain

Free­hold prices stag­nant dur­ing pe­riod when 50 000 homes were sold

Weekend Argus (Saturday Edition) - - PROPERTY -

SOUTH Africa’s econ­omy may be mak­ing prop­erty own­er­ship a lit­tle harder to achieve, but sta­tis­tics re­veal that more than 50 000 homes were pur­chased from July to Septem­ber.

Fur­ther­more, 36 740 bonds were reg­is­tered at the Deeds Of­fice dur­ing this pe­riod, to­talling al­most R39 bil­lion. The av­er­age bond amount was R1.1 mil­lion. This is ac­cord­ing to Re/Max’s Q3 Na­tional Hous­ing Re­port, which also states that of the 52 011 homes bought, 6 562 were first-time reg­is­tra­tions.

In the re­port Adrian Goslett, re­gional di­rec­tor and chief ex­ec­u­tive Re/ Max South­ern Africa, says the av­er­age price of a sec­tional ti­tle home has in­creased by 4% this year. By com­par­i­son, the av­er­age price of a free­hold prop­erty has re­mained stag­nant. Sta­tis­tics from Light­stone re­veal that cur­rently, the na­tional me­dian price of a free­hold prop­erty is at R1.087m, with the na­tional me­dian price of a sec­tional ti­tle unit at R954 662.

“The de­cel­er­a­tion in free­hold house price growth can be at­trib­uted to poor eco­nomic growth, con­tin­ued po­lit­i­cal un­cer­tainty and sub­dued busi­ness and con­sumer con­fi­dence. Due to high de­mand for sec­tional ti­tle units and the cur­rent lack of in­ven­tory, these types of prop­er­ties have been less af­fected by eco­nomic con­di­tions. So far this year, 87 935 free­hold prop­er­ties and 45 438 sec­tional ti­tle homes have been sold coun­try­wide.”

Goslett fore­casts the sup­ply of in­ven­tory to the mar­ket will con­tinue to re­main con­strained with build­ing ac­tiv­ity sub­dued, which should aid prop­erty pric­ing to some de­gree. Stats SA data shows that from Jan­uary this year to July, only 22 900 res­i­den­tial homes were built.

Dur­ing what many con­sider to be the peak of the prop­erty boom in 2007, nearly dou­ble the num­ber of homes were con­structed dur­ing the same pe­riod. While gen­eral build­ing ac­tiv­ity has slowed, by cat­e­gory, there has been a marked in­crease in the con­struc­tion of flats and town­houses, as well as small houses mea­sur­ing less than 80m2. Con­versely, the con­struc­tion of large homes has halved from 2016.

Goslett says af­ford­able hous­ing was still the front-run­ner in Q3, with homes priced be­low R400 000 con­tin­u­ing to out­sell other price brack­ets. About a third (30.35%) of homes sold in South Africa be­tween July and Septem­ber 2017 fall within this price range.

“I have lit­tle doubt the af­ford­able hous­ing mar­ket will con­tinue to out­shine other pric­ing cat­e­gories, given the ma­jor­ity of the pop­u­la­tion fall into this sec­tor of the mar­ket.”

Ac­cord­ing to the re­port, 24.54% of homes sold from July to Septem­ber were priced R400 000 to R800 000, while those priced from R800 000 to R1.5m made up 24.3% of the coun­try’s home sales dur­ing the same pe­riod. Homes priced from R1.5m to R3m rep­re­sented a 15.19% share of the mar­ket, and prop­er­ties priced over R3m ac­counted for just 5.62%.

New re­search by Light­stone has re­vealed that the 6.5 mil­lion reg­is­tered res­i­den­tial prop­er­ties in South Africa are val­ued at a to­tal of R5 tril­lion. Of the to­tal reg­is­tered res­i­den­tial prop­er­ties, free­hold homes ac­count for 69.7%, es­tates for 15.5% and sec­tional ti­tle homes for 14.8%.

Al­though Gaut­eng is the small­est province, Light­stone says it is home to the big­gest por­tion of to­tal prop­er­ties in value and vol­ume. The Western Cape is sec­ond and KwaZu­luNatal third.

“Gaut­eng and the Western Cape in­clude more than half of all the num­ber of prop­er­ties and two thirds of the to­tal value. As the big­gest province, the North­ern Cape is still the least de­vel­oped res­i­den­tial province with less than 1.3% of the to­tal value of res­i­den­tial prop­er­ties.”

The overview also says: “Like Cape Town, Jo­han­nes­burg has a much larger pro­por­tion of prop­er­ties in the up­per value band with al­most one third of prop­er­ties worth

‘I pre­dict the


Older South Africans are look­ing to es­tab­lish them­selves in the Western Cape, which has a num­ber of re­tire­ment op­tions, in­clud­ing the Ev­er­green Life­style Vil­lage in Muizen­berg.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.