The size of your home in South Africa is shrinking: here’s why

 ·3 Aug 2017

As urban land scarcity has increased since the 1970s, urban densification in South Africa has been the order of the day – average full title stand sizes have almost halved, building sizes have shrunk, and sectional title homes have become far more common.

In the modern day, urbanising South Africa – with its general government fiscal constraints, low rates of economic infrastructure investment, much of this around cities – has led to a growing effective land constraint, said FNB property analyst, John Loos.

He said that a major change in home building characteristics has taken place in an attempt to address a mounting affordability challenge in an increasingly land-scarce urban environment.

“We believe that South Africa’s urban land scarcity began to increase noticeably from a stage of the 1970s onward. A key change at that stage was the steady stagnation in general government fixed investment. This was due to a general deterioration in the state of government finances as a worsening political situation caused major economic and government revenue stagnation.

“One of the expenditure items to suffer was general government economic infrastructure investment. Rapid urbanisation further increase the pressures,” Loos said.

Average full title stand size diminishes

A long-term acceleration in government infrastructure investment through the 1950s and 1960s to early-70s corresponded with an increase in the average size of full title residential stands to an average peak size of 1,063 square metres for homes built from 1970-1974.

Admittedly, much of the urban infrastructure investment was in and around the highly-traded former “white” suburban areas.

With the onset of steadily declining focus on infrastructure by general government, the country went into a long-term declining trend in the average stand size of a house, FNB said.

It said that 2.5 years into the current 5-year period, i.e. 2015 to 2019, the average size of a full title stand to date has measured 552 square metres – almost half the average stand size of full title homes built in the early-70s.

“We have long since said that the major region with the most acute land scarcity has been the City of Cape Town, with its sea on a few sides and a large mountainous nature reserve in the middle.

“Not surprisingly, therefore, we see the Western Cape Province having the lowest average Full Title stand size of 487 square metres,” Loos said.

Landlocked Gauteng has typically had less land scarcity, but has been narrowing the gap as it grows and becomes more congested, and its average full title stand size is not far larger at 552 square metres.

Less developed and less congested KZN, however, has an average Full Title stand size of 802 square metres, significantly larger.

But the adjustment to land scarcity in more recent times has gone further than merely a reduction in average size of full title stands. Average building size has also declined significantly, from a 203 square metre peak for those built from 1970-1974, to 162 square metres for buildings built from 2015 to 2017, FNB said.

“It seems, however, that households are far happier to dispense with outdoor space than indoor space in the quest for affordability. This is reflected in the decline in full title building size not having kept pace with the decline in average stand size,” said Loos.

The result has been an increase in the full title land utilisation rate (building size/stand size) from a low of 20.4% for homes built from 1975-79, to 33.2% for the period 2015-17.

Sectional Title grows in significance

Since the 1985-89 period, where only 6.09% of homes built were sectional title homes, there has been a shift to increased sectional title living, where land is far more highly utilised, with sectional title homes built from 2015 to 2017 amounting to 27.06% of all homes built in the period.

And as land scarcity mounts, and average stand size gets smaller, so the incidence of multi-storey homes increases. “Whereas the average number of storeys on homes valued by FNB was 1.13 for homes built in the 1985-89 period, this increased to 1.39 storeys by the 2015 to 2017 period, FNB said.

“Declining fertility rates and a smaller average size of household has also contributed to the demand for a smaller sized home with less bedrooms on average. Therefore, we have seen a noticeable long-term decline in the percentage of homes built with three and four bedrooms,” Loos said.

For homes built in the 1970-74 period, 10.9% had five bedrooms. By the 2015 to 2017 period only 1.39% of the homes built had five bedrooms.

Of those homes built in the 1975 to 79 period, 23.32% had four bedrooms. This percentage had declined to 5.64% by 2015-17.

Even the previously-most popular three bedroom homes category has seen some decline in significance, FNB said. Of homes built in the 1985 to 89 period, 55.04% had three bedrooms. This had declined to 39.25% by the 2015 to 2017 period.

And in the 2005 to 2009 period, the two bedroom home overtook the three bedroom home as the most prevalent, with 41.46% of homes built in that period being with two bedrooms, compared to 41.07% being 3 bedroom. The two bedroom percentage was 41.51% in 2015 to 2017.

“We have also seen a noticeable increase in the prominence of one bedroom homes, from 1.84% of total homes built in 1985 to 89, to 12.05% by 2015 to 2017,” Loos said.

“Interestingly, though, despite smaller homes with less rooms on average, implying less people, there has not been a similar decline in the number of bathrooms per house. For homes valued by FNB, those built in the 2015 to 2017 period had 1.57 bathrooms per home on average. This is only marginally lower than the 1.64 high reached in homes built from 1980 to 1984,” the analyst said.

Read: Salaries in South Africa: the gap between Joburg vs Cape Town vs Durban

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