One of the hallmarks of post-lockdown resilience in the housing market is strong demand from young people and first-time buyers – the latter, according to Ooba, currently accounting for 52.4% of residential property purchases for the year to date. in September 2020.
While this traditionally signals a strong demand for sectional title homes – the preferred type of property among first-time buyers for security, low maintenance, gated living and relative affordability – an interesting trend seems to be emerging, said Dr Andrew Golding, Managing Director of the Pam Golding Property Group.
“What is becoming evident in this new ‘post-lockdown’ environment is that freehold home price inflation has stabilized and is starting to firm up slightly, while the growth in securities prices sectionals continue to slow down. For the year to date (Jan-Oct 2020), freehold home price inflation has averaged 2.6%, while section headline inflation has averaged only 1.8%.
“This suggests that demand, in the post-lockdown environment, is greater for freehold homes than for sectional title homes – in a reversal of a long-term shift to sectional title homes. It seems likely, however, that this demand is likely to be felt less in the traditional, relatively more expensive suburbs, and more in the relatively affordable areas on the outskirts of metropolitan areas or in previous vacation and retirement towns.
For those who choose to buy a house on a modular basis, there is an apparent shift towards the desire for more space in the apartment for work-from-home scenarios.
“In some cases, we see that some developers are converting one-bedroom apartments to two-bedroom apartments – likely to allow occupants to reserve dedicated space for those who are now able to work from home or provide additional space. for an extra family member, ”said Dr Golding.
For example, at Burmeister on Park in Milnerton on the west coast of Cape Town, the demand for two-bedroom units is such that developers have reconfigured one-two-bedroom units to cater for these buyers.
Sold for R 2.85 million, the larger 80m2 two-bedroom option is aimed at homeowners and investors seeking convenience of location as well as lifestyle, said Emarie Campbell, director of the Pam Golding Properties area on the West Coast.
“This trend towards two bedrooms rather than one makes sense, as a spacious two-bedroom, two-bathroom apartment is always in demand, while there are enough vacant one-bedroom units to buy and a supply surplus of one bedroom apartments for rent in this area.
“This is largely due to the fact that tenants have either moved into a sharing situation or returned with their families as the fallout from Covid-19 and the lockdown materializes, as Airbnb’s traditional marketplace s ‘stopped.”
There is also a trend for micro-units of around 30m2 and priced below R1 million, aimed at first-time buyers in the area near city centers or malls, Campbell added.
“In Stellenbosch, two-bedroom units have always been the most popular, although one-bedroom units and studios also work well here, arguably largely due to their affordable price. A tendency for students to live alone is also emerging, as in this post-Covid environment, parents of students show a preference for the isolation opportunity offered by studios and one-bedroom apartments, ”Katya said. Varga, zone assistant and project manager. for Pam Golding Properties in Stellenbosch and Somerset West.
“In the Mzuri residential development in Somerset West, developers have reworked their 132 one and two bedroom apartments offering 84 two bedroom, pet-friendly townhouses with small walled gardens, priced at $ 1.595 million. rand, VAT and targeting included. millennials and first-time home buyers. “
The Pam Golding Residential Property Index provides a breakdown for two- and three-bedroom (not one-bedroom) apartments, but here too, demand for larger apartments is apparent, with apartment prices outperforming by three-bedroom versus two-bedroom apartments, noted Sandra Gordon, Pam Golding Properties senior research analyst.
The price growth in this category shows that demand is exceeding supply and it seems likely that there are fewer three bedroom apartments on the market than two or one bedroom apartments.
“For the year to date (January-October 2020), average house price inflation for three-bedroom apartments has averaged 2.04%, while for two-bedroom apartments it has been average of 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 the price inflation for three-bedroom homes has fallen to 2, 8% in October against only 1.9% for the two chambers. “
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