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One of the characteristics of post-lockup resilience in the housing market is strong demand from young and new buyers, the latter, according to Ooba, currently accounting for 52.4% of residential property purchases for the year until September 2020.
While this would traditionally indicate strong demand for sectional title homes, the preferred property type among first-time buyers for security, low maintenance, lock-and-use lifestyle, and relative affordability, appears to be an interesting trend emerging, said Dr. Andrew Golding, Group CEO Pam Golding Property.
“What is becoming evident in this new ‘hard post-lockdown’ environment is that freehold home price inflation has stabilized and is starting to strengthen marginally, while home price growth sectional continues to slow down. For the year to date (January-October 2020), freehold home price inflation has averaged 2.6%, while sectional title inflation has averaged just 1.8%.
“This suggests that demand, in the post-closing environment, is stronger for wholly owned homes than for sectional title homes, in reversal of a long-term shift to sectional title homes. However, it seems likely that this demand will be felt less in the traditional, relatively more expensive suburbs, and more in relatively affordable areas on the periphery of metropolitan areas or in vacation towns and former retirees.
For those who choose to purchase a sectional title home, there is an apparent shift toward wanting more space in the apartment for work-from-home scenarios.
“In some cases, we are seeing some developers converting one-bedroom apartments into two-bedroom units, most likely to allow occupants to reserve a dedicated space for those who can now work from home or to provide additional space for an additional member of the family, ”Dr. Golding said.
For example, at Burmeister on Park in Milnerton on Cape Town’s west coast, the demand for two-bedroom units is such that developers have reconfigured the one-bedroom units into two to cater to those buyers.
Priced at R2.85 million, the larger two-bedroom, 80-square-meter option is aimed at homeowners and investors who want the convenience of location along with the lifestyle, said Emarie Campbell, area director for Pam Golding. Properties on the west coast.
“This trend towards two bedrooms instead of one makes sense, as a spacious two-bedroom, two-bathroom apartment is always in demand, while there are enough empty one-bedroom units to buy and a glut of one-bedroom apartments. for rent in this area.
“This is largely due to the fact that tenants have moved into a shared situation or returned to their families as the aftermath of Covid-19 and the lockdown unfold, while the traditional Airbnb market has shifted. arrested”.
There is also a trend towards micro units of around 30 square meters priced below R1 million, catering to first-time buyers in the area close to city centers or shopping malls, Campbell added.
“At Stellenbosch, two-bedroom units have always been the most popular, although studio and one-bedroom units work well here too, no doubt in large part because of the affordable price. There is also a trend emerging of students favoring life on their own, as in this post-Covid environment, parents of students show a preference for the isolation opportunity offered by studios and one-bedroom units, ”said Katya Varga, area assistant and project manager. for Pam Golding Properties in Stellenbosch and Somerset West.
“At the Mzuri residential development in Somerset West, developers have remodeled their offering from 132 one- and two-bedroom apartments to 84 two-bedroom, pet-friendly townhomes with small enclosed gardens, priced at R1.595 million, including VAT and targeting millennials and first-time home buyers. “
Pam Golding’s Residential Property Index provides a breakdown for two- and three-bedroom (not one-bedroom) apartments, but here too the demand for larger apartments is evident, outperforming three-bedroom apartments in compared to two-bedroom, said Sandra Gordon, Senior Research Analyst at Pam Golding Properties.
Price growth in this category shows that demand exceeds 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 home price inflation for three-bedroom apartments has averaged 2.04%, while for two-bedroom apartments it has been 1.6 %. However, the growing divergence in home price inflation between two- and three-bedroom apartments is most apparent when looking at the most recent data revealing that three-bedroom home price inflation rose to 2, 8% in October compared to just 1.9% for two bedrooms. “
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