The property needs in South Africa are evolving as more and more people move into urban areas. In 1960, around 46.6% of the population lived in urban areas, however, that figure has changed dramatically with around two-thirds of the South African population now living in metropolitan hubs.
“Urban living surpassed rural living in South Africa in 2009. Currently, South Africa has a higher urbanisation rate than the world average, and it is expected to continue increasing at a rapid rate.”“Urban living surpassed rural living in South Africa in 2009. Currently, South Africa has a higher urbanisation rate than the world average, and it is expected to continue increasing at a rapid rate.”
As a result, he says density, scarcity and re-urbanisation will be the key long-term themes in the property market for some time, as the current stock does not support the growing demand for urban property.”
Goslett says there are two major causes that have brought about the trend - one being that people in post-apartheid South Africa have more freedom to move around, and the other that there is higher economic growth within metropolitan areas.
“People are drawn to urban areas because there are greater employment opportunities. Urbanisation has created a concentration of economic activity, which is alluring to people who need jobs,” he says.
Goslett says urbanisation is not a trend that is unique to South Africa. Globally around 54% of the world’s population currently lives in urban areas, which is around 3.9 billion people.
He says urbanisation is not a trend that is unique to South Africa. Globally around 54% of the world’s population currently lives in urban areas, which is around 3.9 billion people.
It is estimated that this will grow to around 66% by 2050, which is in the region of 6.4 billion people. It is expected that as a continent, Africa’s rate of urbanisation will overtake Asia’s by the year 2030.
“Currently the property stock in South Africa is mostly full title homes, with this type of property accounting for 82.7% of the current market stock. Sectional title homes represent around 12% of the property stock, while estates make up the remaining 5%,” says Goslett.
“As the population continues to push into urban areas and land becomes more and more scarce, it is likely that there will be far fewer full title homes being built.”
According to statistics from Absa, in the last 20 years, flats and townhouses have made up 26.6% of newly completely buildings. In the last three years, around 36% of all residential development units financed by Absa were sectional title units.
“Sectional title homes are in great demand due to a few reasons, such as financial pressure on consumers, inadequacy of land and a changing lifestyle demand,” says Goslett.
“It has been said that full title properties may well become an impractical and outdated luxury for most South Africans.”
He says the changing property needs within the country are no longer merely a trend - they are a reality.
“People are migrating to suburban inner-city areas where they can live, work and play, eat and shop. This not merely because it is the place to be, but rather because of the convenience and lifestyle urban living provides,” says Goslett.
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