New data shows that more South Africans are moving away from the ‘dream’ of stand-alone homes somewhere in the suburbs, as tough economic times push people to more affordable complexes and other sectional title residences.
This is according to information supplied by property group, HomeBid, analysing the latest data from deeds offices across the country.
According to HomeBid, data shows that more and more deed transfers processed in the country and for people moving into sectional title residences – often complexes or other developments, in which people own units on common property.
The sectional title market place is driven by affordability and, to a lesser degree, the perception of better security, the group said, though the focus for first- and second-time home buyers is more on affordability.
“By now we all know that the South African economy is faltering badly and the prognosis for its possible future is for low growth, if any,” said property economist and HomeBid adviser, Neville Berkowitz.
“All South Africans are facing falling employment numbers, interest rate increases, and no increases in real terms in wages and salaries coupled with electricity load shedding affecting productivity levels.”
“Consumers are pulling in their horns and watching every cent they spend while business confidence is at a 16 year low”, he said.
This has translated to a boom in the “Gash” market (Good Address, Small Home) of properties, which are dominated by sectional titles in the R500,000 to R1 million price range.
These sectional title homes are usually found in areas on the outskirts of municipalities where land is cheapest, as well as in or near city centres, in older apartment living.
Using data from deeds offices across the country, HomeBid identified that all major metropolitan areas, from Cape Town to Durban, Johannesburg and Pretoria, all saw an increase of sectional title transactions in 2015.
Sectional titles in these major areas are now made up of between 25.1% (Cape Town) and 38.7% (Durban) of all homes transferred in 2015. Joburg and Pretoria sits around 37.1%, HomeBid said.
“For the foreseeable future we expect the sectional title market place to grow at the expense of free standing homes as affordability constraints and better perceived security drive buyers decision making”, Berkowitz said.
According to data published by Absa, around 63% of all their home loans for residential development units during the past three years have been for sectional title units.