SECTIONAL TITLE INVESTING
In contrast , the volume of transfers of sectional title homes and homes located in estates has climbed steadily since 2018 ( with a brief dip in 2020 ). While freehold homes still made up most of the transfer volume in 2021 , the popularity of sectional title homes , homes in new developments and homes located in estates continues to surge across South Africa .
Adding to the appeal of these homes are lower insurance costs , shared maintenance costs and a sense of community . When it comes to investing , Lightstone ’ s latest data also revealed that , compared to full title homes , sectional title properties have enjoyed a lower inflation rate since 2010 .
However , while the popularity of these homes will continue to dominate over the next few years , it is adding extra cost pressures to homeowners . Sectional title homes , new developments and properties located in estates are notorious for high levies . This is largely due to security costs and added amenities . If there is onsite security , a restaurant , squash court or swimming pool on-site – its cost is being covered by the homeowners .
Excess supply of full title homes
The trend of low House Price Inflation ( HPI ) in South Africa cannot be denied . The excess supply of homes on the market has given rise to a prolonged buyers ’ market in some parts of South Africa , while in high demand lifestyle areas , sellers remain in control .
A large part of the excess supply lies in freehold homes and new developments in over-developed , densely populated areas . Homes in areas where there are security concerns are also moving slowly .
Looking to new developments , property developers like Balwin Group have been cashing in on
60 DECEMBER 2022 / JANUARY 2023 SA Real Estate Investor Magazine