Affordability and good security in Gauteng’s ST homes

Sectional title properties are more popular than ever in the Gauteng suburbs, and indeed around South Africa, with the demand for these types of homes continuing unabated despite the inflationary pressures currently being felt by many households.

The latest Pam Golding Residential Property Index, which provides an in-depth analysis of property trends in South Africa, reveals that nationally in 2000 just 10.9% of residential building plans passed were for sectional title properties. In 2015 this figure was 38%.

This is according to Dr Andrew Golding, chief executive of Pam Golding Properties group, who says this trend has also been evident in Gauteng areas. For example, sectional title properties make up close on 30% of all units sold by the PGP Hyde Park office.

“Over the years, we have seen the sectional title market within both Johannesburg and the Tshwane region rapidly grow in importance. This has been quite a phenomenon and we believe that the trend will continue despite indications that the growth in the overall South African economy has slowed in recent months,” he says.

“The development of Midrand, one of the fastest developing growth centres in the country, makes for an interesting case study with regards to the sectional title market.”

Dr Golding says according to residential property research company Lightstone, while Midrand has doubled its number of residential properties since 2000, the area has seen a substantial 550% increase in the number of its sectional title properties.

“This gives an idea of just how popular this form of property ownership has become.”

He says there are a number of reasons for the rise of the sectional title property market within the Gauteng province and at the national level, particularly over the last 10 years.

Among these is the fact that sectional title developments have been perceived as offering good value for money and sound security.

“In addition, a number of people want to enter the property market while a home still remains within their reach. Due to their affordability, sectional title homes offer an excellent way to gain a foothold in the residential property market for first-time home seekers.”

Furthermore, he says there has been a growing urbanisation within Gauteng, and recently land has become scarcer in the province. At the same time, traffic congestion and transport costs have been on the increase.

These trends are encouraging people in both Pretoria and Johannesburg to live close to growth nodes with easy access to the workplace and educational institutions, says Dr Golding.

“This is resulting in residential densification within these nodes. Rosebank, Fourways, Midrand, and Menlyn in Pretoria are just four examples of such rapidly growing centres, and we are seeing ongoing demand for quality accommodation either in or near these nodes.”

Dr Golding says some individuals are choosing upmarket sectional title apartments in Sandton, Rosebank and now Menlyn because they offer convenience, security and cosmopolitan city living. Of the 227 apartments that were placed on sale off-plan at The Regency in Menlyn earlier this year, just 40 now remain on the market.

“The success of The Regency, which is the first luxury high rise of its kind in the area, is an indication of just how popular this type of urban lifestyle is becoming,” he says.

“And its success is being replicated in other parts of Gauteng, such as the various residential phases of Melrose Arch and in upmarket apartment blocks being developed in Rosebank, a large number of which have already been purchased off-plan.”

In the Johannesburg city centre and Braamfontein, on the other hand, older apartment buildings have been purchased, renovated and placed back on the market, he says. These are being snapped up by buyers looking for primary homes and the buy-to-let market.

“The developers of mixed-use spaces such as Steyn City in Fourways have also been sure to include a sectional title component to their offering. This has provided investors with a range of further property options to choose from,” he says.

Dr Golding says it is not only apartment living that is proving popular. Townhouse and cluster developments are also sprouting up all over the province.

“People are looking to live in integrated communities where there is a strong emphasis on security, shared costs and, increasingly, sustainability. This trend is, in other words, being driven by concerns regarding security, rising municipal costs and insecure electricity supplies.”

Rupert Finnemore, joint area manager for Pam Golding Properties Hyde Park, says sectional title properties tend to offer sound value for money, and the opportunity to buy a more affordable home in an upmarket area.

“A well-run complex or apartment block offers positive capital growth prospects and guaranteed rental demand. The fact that residents together contribute to the upkeep of the complex and the maintenance of facilities means that sectional title developments tend to keep the cost of living more affordable,” says Finnemore.

In addition, he says residents are able to share costs such as water, insurance and garden services.

“Security remains an important concern for buyers around Johannesburg. Sectional title developments make excellent security more affordable, allowing access control, perimeter electric fences and other measures to be put in place,” says Finnemore.

“Living in a secure complex enables a highly convenient ‘lock-up and go’ lifestyle that many people in Gauteng appreciate.”

Residents also value the community living afforded by townhouse complexes, as well as excellent amenities such as clubhouses, restaurants, swimming pools, tennis courts and other facilities that may be offered, he says.

Finnemore says the value of a sectional title property can vary considerably and depends on factors such as the size of the property, its general condition, how well it is maintained, how attractive communal areas are and what amenities are offered.

They can go on sale for anything between R300 000 and R60 million. There is a particularly strong demand for homes between R300 000 and R2.5 million.

Jonathan Davies, PGP Hyde Park region joint area manager, says when you buy a property in a sectional title complex you are buying exclusive ownership of the unit or section that you have purchased. At the same time, you become a joint owner of the common property of the development.

“Depending on the type of property purchased, you may also be entitled to the exclusive use of a garden, parking space and staff quarters. Your section is usually an apartment or townhouse and it may be situated within a gated community or estate.”

Davies says sectional title schemes are strongly regulated by the Sectional Titles Act, which covers all aspects of owning this kind of property, affording any would-be buyer a good measure of protection.

“The process of finding a suitable sectional title scheme to invest in is best undertaken with an experienced agent who understands the market and has your best interests at heart. This will help to ensure that you choose a property that is right for you and will grow in value.”