for space sees shift towards freehold homes and two and three-bedroom sectional
Nov 23, 2020 . Courtesy Private Property
the characteristics of the post-lockdown resilience in the housing market is
the strong demand from young and first-time buyers – with the latter, according
to ooba, currently comprising 52.4% of residential property purchases for the
year to September (2020).
this would traditionally signal strong demand for sectional title homes - the
preferred property type among first-time buyers for the security, low
maintenance, lock-up-and-go lifestyle and relative affordability – an
interesting trend appears to be emerging, says Dr Andrew Golding, chief
executive of the Pam Golding Property group.
becoming evident in this new ‘post-hard lockdown’ environment is that freehold
house price inflation has stabilised and is beginning to strengthen marginally,
while price growth for sectional title homes continues to slow. For the year to
date (Jan - Oct 2020), freehold house price inflation has averaged 2.6%, while
sectional title inflation has averaged just 1.8%.
suggests that demand, in the post-lockdown environment, is stronger for
freehold homes than sectional title homes – in a reversal of a long-term shift
towards sectional title homes. It seems likely, however, that this demand is
probably being felt less in the traditional, relatively more expensive suburbs
and more in relatively affordable areas on the periphery of metro areas or in
previous holiday and retirement towns.”
Golding: “And for those opting to purchase a sectional title home, there is an
apparent shift towards wanting more space in the apartment for work-from-home
scenarios. In some instances, we are seeing that some developers are converting
one-bedroom apartments to two-bedroom units – most likely in order to allow
occupants to set aside a dedicated space for those now able to work from home
or provide extra space for an additional family member.”
example, in Burmeister on Park in Milnerton on Cape Town’s burgeoning Western
Seaboard, such is the demand for two-bedroom units that the developers have
reconfigured one-bedroom units to two in order to cater for such buyers.
Selling for R2.85 million, the larger 80sqm, two-bedroom option is aimed at
owner-occupiers and investors who want the convenience of the location along
with the lifestyle, says Emarie Campbell, Pam Golding Properties area principal
on the Western Seaboard.
trend towards two bedrooms rather than one makes good sense as a spacious
two-bedroom, two-bathroom apartment is always in demand, while there are
sufficient vacant one-bedroom units to buy and an over-supply of one-bedroom
apartments to rent in this area. This is largely due to the fact that tenants
have either moved into a share situation or back with their families as the
fallout from Covid-19 and the lockdown manifests itself, while the traditional
Airbnb market has come to a halt.
adds Campbell, “there is also a trend for micro units of around 30sqm and
priced under R1 million, catering for first-time buyers in the area close to
city centres or commercial hubs.”
Varga, assistant area and projects manager for Pam Golding Properties in
Stellenbosch and Somerset West adds: “In Stellenbosch two-bedroom units have
always been the most popular, although one-bedroom and studio units also
perform well here, no doubt largely due to the accessible price point. A trend
of students favouring living on their own is emerging too, as in this
post-Covid environment, parents of students show a preference for the isolation
opportunity which studio and one-bedroom units offer.
residential development in Somerset West, the developers have reworked their
132 one and two-bedroom apartment offering to 84 two-bedroom row-houses,
pet-friendly and with small enclosed gardens, priced from R1.595 million
including VAT and targeting millennials and first-time home buyers.”
Sandra Gordon, Pam Golding Properties senior research analyst: “The Pam Golding
Residential Property Index provides a breakdown for two and three-bedroom
apartments (not one-bedroom) but here too the demand for larger apartments is
apparent, with price outperformance of three-bedroom apartments over
two-bedroom units. Growth in prices in this category shows that demand is
outstripping supply, and it appears likely that there are fewer three-bedroom
apartments on the market than two or one-bedroom apartments.
year to date (Jan – Oct 2020), average house price inflation for three-bedroom
apartments has averaged 2.04% while for two-bedrooms it has averaged 1.6%.
However, the growing divergence in house price inflation between two and
three-bedroom apartments is more apparent when looking at the latest data which
reveals that three-bedroom house price inflation rose to 2.8% in October compared
to just 1.9% for two-bedrooms.”