As households move to economic nodes along public transport corridors to avoid traffic congestion, and young professionals gravitate towards city centres, densification is a global trend and South Africa is not likely to be any different.
The potential role that improved public transport could play in triggering the next property boom has been highlighted by UCT’s Associate Professor Francois Viruly, who says each local property boom in the past 20 years has typically been associated with a unique social catalyst, such as industrialisation or an increase in the number of cars, which has led to the rise of suburban living.
With the latest property cycle having come full circle, he believes the next boom could begin as soon as 2018 and will likely be driven by improved public transport and the desire of households to live in smaller residential units that offer easy access to work, leisure activities and educational facilities.
Dr Andrew Golding, chief executive of the Pam Golding Property group, says: “Driving demand for residential accommodation, both to buy and rent, in economic nodes and key hubs around the country, densification and urbanisation is seeing cities becoming more crowded. In line with this the demand for land for residential accommodation increases exponentially and wherever possible, new suburbs open up and urban sprawl increases.
“The requirement for security is another consideration which is an important driver of home buying decisions. So, as a general trend, sectional title as a property type is increasingly in the sights of home seekers – including first-time buyers – with its advantages of security and in many instances, convenient apartment living.”
According to Absa, in the past 20 years flats and townhouses have made up 26.6 percent of newly completed buildings, while the past three years, 63 percent of residential development units which they financed were sectional title units – a trend it anticipates will continue.
In the Western Cape, the increasing popularity of sectional title living is clearly evident not only in Cape Town’s successful regeneration of the central city, but also in areas such as the sought-after Atlantic seaboard and prime pockets in the southern suburbs and burgeoning areas of the western seaboard, says Laurie Wener, MD of Pam Golding Properties in the Cape Town Metro region.
“Coastal areas have proved the most popular for apartment dwellers for permanent, part-time or holiday usage, with beach and ocean views increasing desirability and value.”
Says Basil Moraitis, Pam Golding Properties area manager for the Atlantic seaboard and City Bowl: “There has been a notable increase in the total value of sectional title sales versus full title sales. The last time the value of full title sales exceeded sectional title sales was in 2012; since then the sectional title market has exceeded the value of full title in both total value and unit numbers.
“This is now about to escalate to all-time highs as a considerable number of freestanding properties have been secured by developers over the past three years and developed into boutique blocks of apartments all along the Atlantic suburbs, and these are about to be registered as for the first time.”
There has been an overwhelming demand for the Atlantic Seaboard lifestyle, and to accommodate this, many developers who saw this trend emerging began to secure sites on the slopes of Signal Hill, Lion’s Head, and from Green Point right into the Waterfront and the harbour precinct, says Moraitis.
This trend has translated into continued sustained demand for a lock-up-and-go convenient lifestyle within easy reach of the beaches, not to mention the proximity to the city centre for business and entertainment.
“The proximity of all these attractions, many within walking distance, has meant the transport links are not as important as they might be in other emerging areas,” says Moraitis.
Pockets of strength in the residential property market will remain in the metro areas – which in KwaZulu-Natal is somewhat of an anomaly as the growth and demand is decentralised in the corridor north of Durban, including the uMhlanga and Ballito areas, says Golding.
The relocation of King Shaka International Airport, coupled with decentralisation of business nodes and schools and the proliferation of new up-market housing estates there, has triggered a migration of families from elsewhere in the province and commuters from neighbouring regions.
A new trend towards mixed-use developments sees the “live, work and play” concept unfolding at a rapid rate in uMhlanga. The Gateway node is a prime example of mixed use, while the new Sibaya node near Umdloti will also have a mixed-use development plan.
The general sentiment is that Sibaya is set to put KZN on the international map, and for the first time KZN will be able to rival Cape Town, says Carol Reynolds, Pam Golding Properties area principal for Durban Coastal.
“We anticipate foreign interest in the area as well as strong demand from buyers in other parts of the country. Commuters from Joburg will find the area attractive because of its proximity to the airport.
“In addition, we expect locals to flock to Sibaya because it is close enough to uMhlanga to afford local residents a convenient lifestyle and security.”
Says Greta Daniel, sales and operations manager for Pam Golding Franchise Services: “KZN offers more convenience than most other parts of the country, as schools and corporate hubs are scattered in nodes across the territory.
“For example, you can live, work and play within the suburbs of Durban North, La Lucia, Morningside or uMhlanga.
“Each node is fully self-sufficient with its own office hub, banking node and schools – in fact Durban North has more than 10 schools within a 10km radius.”
As new stock becomes available to purchase on KwaZulu-Natal’s rapidly expanding residential property market, it is rapidly snapped up by eager buyers wanting to acquire a home on this prime stretch of real estate, says Neil de Beer, Pam Golding Properties area manager in the Ballito area.
“The attraction to the greater Ballito area stems from a strong demand for homes in the region’s high performing residential estates such as Simbithi Eco Estate, where demand far outstrips supply – activating a healthy resale market.”
The renowned Zimbali Estate continues to appeal to the affluent buyer with an active and highly attractive variety of stock available. Zimbali, like Simbithi, offers a wide variety of estate-based facilities for homeowners which match and even exceed Joburg-based estates while including a coastal lifestyle.
Against a background of a muted economy, Joburg and Pretoria continue to develop at a rapid pace with expansion being particularly evident across a number of growth nodes, says Golding.
With transport costs and traffic congestion on the increase, residents here are looking to live close to economic nodes and transport corridors that allow easy access to the workplace and educational institutions.
“This is resulting in rapid residential densification within growth nodes such as Rosebank, Midrand and Fourways. In addition, Joburg itself and Braamfontein are undergoing massive re-development while the growth of Sandton continues unabated.”
Furthermore, centres such as Fourways and Menlyn are being described as “new mini-Sandtons”, while Midrand has doubled its number of residential properties, in addition to increasing its number of sectional title properties by 550 percent since 2000, according to Lightstone.
Research shows that about half of all estates in South Africa are in Gauteng.
Residential property investors have noted the strong demand for quality accommodation within the growth nodes of Gauteng and a number of major residential developments and re-developments have been the result.
One on Whitely, the next residential phase of the booming Melrose Arch mixed-use precinct, has been launched, while at Park Central in Rosebank, more than 150 units have been sold.
For more information on these property developments go to www.pamgolding.co.za
Bianca Coleman, Independent HOME