Real Estate Investor Magazine South Africa Real Estate Investor Magazine - October 2017 | Page 41

DEVELOPMENT
while we today have a residential community of around 7 000
that did not exist 10 years ago, that community is very small
compared to the hundreds of thousands of people who com-
mute into the area each day.
“While we know that a successful downtown can only truly
be successful if it has a vibrant mix of people from across the
economic spectrum living in it, we’ve seen a high demand on
the relatively limited numbers of residential units that have
been created over the past 10 to 15 years. And this, in turn,
has driven prices up as one would see in any high-demand,
low-supply chain – both in terms of residential units already
on the market and in the provision of new ones, because the
price of land and buildings is key to the development of af-
fordable sales or rental stock.
No time to waste
A third, notes Dean van Zyl, chairperson of the Western Cape
Property Development Forum, may be less palatable to devel-
opers: the possibility of legislation.
Says Van Zyl: “We need to recognise the risks that may
be coming our way as developers if we ignore the City’s own,
non-negotiable call to action in regard to creating integrated
and inclusive communities, and the possible legislation that
may be forced onto developers if they do not embrace this
concept willingly earlier on. Even if you believe that the local
residential boom in Cape Town will continue, take note that
the political context has changed. It is no longer business as
usual and we, as an industry, need to move forward on our
understanding of the difference between the concept of afford-
able accommodation versus low-cost housing.”
In an area such as the Cape Town Central City, Van Zyl
notes that the first understanding comes with who the primary
market is – often referred to as the “missing middle” or those
homeowners with limited income but who earn too much to
qualify for subsidies.
However, believes Van Zyl: “There are incredible opportu-
nities around affordable accommodation, and not just in terms
of sectional title but perhaps even more importantly in rental
stock. There are developers in Johannesburg and Pretoria who
have already found the business opportunity in affordable ac-
commodation. Western Cape developers stand to lose out if
we do not educate ourselves on this opportunity.
“Affordable accommodation is not charity, it’s a business
opportunity just like student housing became an opportunity
when universities could not provide sufficient accommodation.
And yes, there will be teething problems, but is our industry
not about risk and reward?”
SOURCES
CCID, City of Cape Town, Western Cape Property Development
Forum
SA Real Estate Investor Magazine OCTOBER 2017
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