Real Estate Investor Magazine South Africa Dec/January 2020 | Page 37

Sustainable housing The cost of living in South Africa is getting higher every year. Natural disasters like droughts and water scarcity are only making it worse. The recent electricity price increase and fuel hikes are adding to the slow-growing economic stability in the Southern African region. This affects almost every sector in SA and has an unpleasant impact on the real estate and property sector — especially the residential property investment industry. The rental market (as one of the biggest markets in the residential property investment sector) has been growing at a slow pace since early 2017. From 7.4% in Q1 of 2017, to 3.2% in the third quarter of 2018. In addition, monthly rental growth figures in the first nine months of the year 2019 were rather flat, following on from a similar performance in 2018. This is due to many factors. According to PayProp, the adjusted inflation ‘real rental rate’ has also declined by an average of 0.5% in the first half of 2019. September brought the year’s first positive news in this regard, experiencing the highest YoY growth rate of the year (4.2%), and the first time the monthly growth rate exceeded inflation since April 2018. The national rental growth rate for the last quarter of 2018 has slowed to 4.14% in comparison to a 5.39% growth rate during the same period in 2017. This year, the rental market has been uneventful, with consistent low levels of rental growth that stayed below inflation. According to PayProp, September brought the highest rental growth rate of the year thus far: The exorbitant prices of rental residential spaces in South Africa is the overarching cause of the slow national rental growth in residential property sector and considering the various expenses that come with owning property as an investor, high rental rates are inevitable. The water and electricity bills are the primary factor leading to the high rental prices across the country. The high rental prices threaten the daily lives of many people in South Africa — either directly or indirectly. The ever- increasing electricity costs and load-shedding should urge investors to start investing in sustainable housing to avoid black outs and high electricity tariffs. This is why tenants and homeowners should turn towards ‘going green’ and using their own energy sources to avoid the expensive rates. Solar power systems Debates regarding sustainable solutions to the recurring load shedding, coupled with high electricity tariffs are happening around the country. The most common outcome of these discussions is the use of self-efficient domestic energy resources as well as natural light. Of the many examples on how to cut down on electricity consumption, the sun has proven to be the most efficient alternative energy source. It can be used to substitute electricity in various ways: Solar domestic hot water The solar domestic hot water system is an example of one of the uses of the sun as a self-efficient energy source. The domestic hot water system uses a cost-effective way to generate hot water, cutting down on the amount of electricity used to power geysers. The system works in any climate, operates well and solely uses the sun. Anyone can have it in their home. Air-conditioning system The use of solar-powered air-conditioning has proven to save money and exempt homeowners from paying high electricity prices. It’s become a popular solution in Australia. Hotel rooms, establishments and most commercial buildings have air-conditioning (with heaters) and geysers that are electronically powered. Scientifically, the emissions that come with these systems can be inversely beneficial to one’s home. Inspiration can be drawn from the CSIRO invested air- conditioning system — an innovative three-in-one technology system that provides hot water, cooling as well as heating, all installed in one device. The system uses a fraction of the electricity and halves greenhouse gases emission. The system alternates its uses from providing heat when needed, cooling when the home is heated and hot water when required. Installation for developers might be costly but the benefits are plenty. Off-grid homes In order to reduce the carbon footprint and ensure the success of an eco-friendly environment, mobile homes are the latest trend to follow. While mobile homes (such as caravans) have been around for ages, Real estate and property investors should start looking towards sustainable housing as the idea gains traction around the country. Apart from investing for the sake of sustainable wealth, it is important that investors realise that building a stable and sustainable nation contributes to preserving the environment and keeping it as clean as possible. In South Africa, PanGoPod and Umnyama Ikhaya have been informed about the trend. Umnyama Ikhaya Explaining the trend and how it fits into sustainable housing and eco-friendly living, Umnyama Ikhaya CEO John Venter said “This housing concept is the answer not just for South Africa but stands to benefit the entire continent of Africa due to the lack of infrastructure. It is time and water saving, it’s green and has 100% off-grid capability. This housing concept is fully transportable anywhere in Africa and the world via ship, rail, road and even air as the building blocks is 6,08m L x 2,44m W2,9m H or 12,19m L x 2,44m W x 2,9m H high-cube shipping containers. PanGoPod (an off-grid tiny home) Meanwhile, running off solar power, using water from rainwater harvesting tanks, and a water-free composing loo, PanGoPod is another technique to sustainable housing. This is a full house with all necessary home appliances — apart from energy generation. The homes provide privacy for a shower, a composting toilet, a hand basin, a wardrobe, a washing machine and can offer a reduced environmental footprint. Free movement in a safe, secure, weatherproof shelter, as well as a healthy, beautiful, and nurturing space. SOURCE PanGoPod, PayProp, Umnyama Ikhaya SA Real Estate Investor Magazine DECEMBER/JANUARY 2020 35