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Gauteng buyers set their sights on apartments and townhouses

Sectional title properties, like this 2-bedroom home in Lynwood, Pretoria East, are being snapped up by buyers in Gauteng. Picture: Seeff Property Group

Sectional title properties, like this 2-bedroom home in Lynwood, Pretoria East, are being snapped up by buyers in Gauteng. Picture: Seeff Property Group

Published Aug 23, 2023


There has been a notable shift in the urban property markets in Gauteng, with sectional title homes now a sweet spot for buyers.

This is largely due to affordability, but also security.

Deeds Office data shows that sectional title property transactions comprised about 31 percent of all transfers over the last year, with more than half of those – 52 percent, in Gauteng.

The highest volumes were prevalent in the urban areas around Johannesburg, Randburg, Sandton, Midrand, and Centurion.

Aside from the lower price points, the Seeff Property Group says sectional title property offers key benefits including reduced maintenance, generally better security, and often shared amenities such as swimming pools, gardens, and play areas for children. New developments may also offer gymnasiums.

Sectional title properties include townhouses, apartments or flats, semi-detached homes, and duet houses.

Rising municipal property rates and the increasing costs of utilities, security, and maintenance is also forcing Johannesburg property owners to sell their large homes and move to smaller units, according to the Chas Everitt International property group. This is most evident in the rapid uptake of some new sectional title developments.

Despite challenging market conditions, property sales activity in the city has continued to rise over the past six months, showing that is still the ‘engine room’ of the South African economy. It is also home to most of the country’s top business leaders, industrialists, and entrepreneurs, as well as an increasing number of affluent foreign investors, says Rory O’Hagan, principal of Chas Everitt International’s Sandton and Hyde Park office, which serves the city’s northern suburbs.

“Ambitious young people from smaller towns and less developed regions also continue to move here in search of employment and a better lifestyle.”

In the greater Randburg area, sectional title sales account for 51 percent of all transactions in the past year, despite only making up about 44 percent of all property stock, clearly demonstrating the shift, says Detmar Nuttal, sales manager for Seeff Randburg.

The area is renowned for its affordability and choice of security complexes. These are often sought by first-time buyers, but also young families and those looking to downscale. Security and affordability are two key drivers of the market.

In areas such as Weltevredenpark, Wilgeheuwel, and Allens Nek, sectional title prices range from around R650,000 on average, although there are many options at different price points.

Apartments and townhouses are also popular rental investments, and while it is usually not too difficult to find a tenant to fill a unit, any potential investor must first check whether there is a need for more stock in the particular area, he says.

In Sandton, approximately 60 percent of all sales concluded were sectional titles, even though these only makes up about 55 percent of all property stock. It has been one of the fastest growing sectors of the market in terms of new developments, Seeff says.

The highest volume of sectional title property tends to be in areas such as Bryanston, Morningside, Lonehill, Sunninghill, Paulshof, Douglasdale, and Sandown, but there are also many other areas including Buccleuch and Edenberg.

Charles Vining, managing director for Seeff Sandton, says a key benefit of sectional title property is that it offers more accessible pricing for those looking to live in a Sandton suburb. While a very popular property choice, there has not been any notable spike in prices which is largely in keeping with the generally weak price growth experienced over the last few years. Buyers can therefore find really good value in sectional titles, he adds.

Furthermore, there is growing demand for luxury sectional title properties, including penthouses which are selling for well into the upper millions, around R4m to R6m on average, with luxury units priced upwards of this.

Other popular areas for sectional title home purchases are Midrand, Bedfordview, and Edenvale.

Sectional title property sales also dominate in Centurion, says manager for Seeff in the area, Tiaan Pretorius. These make up about 56 percent of all sales transactions in the past year, and the trend is expected to continue.

Dr Andrew Golding, chief executive of the Pam Golding Property group, agrees that sectional title properties, particularly in South Africa’s major metropolitan areas and key commercial hubs, are in demand as buyers prioritise convenience and affordability. And, encouragingly, developers are responding to this demand.

For young buyers and other first-time home purchasers, smaller properties are appealing because they are more affordable, but lifestyle choices mean they also want secure, lock-up-and-go properties.

It is, therefore, no surprise that the percentage of passed building plans for flats and townhouses has risen from just under 26 percent in 2010 to 47 percent last year, he says.

Given how big the sectional title market is, however, Pretorius says some challenges for the sector include how body corporates will adapt to alternative power needs from residents, and to what extent complexes will look to become self-sufficient in this regard.

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