Estate Living On The Rise
Pent-up demand for gated lifestyle investments with security
BY MONIQUE DU TOIT
L ifestyle gated estates are a big deal in South Africa. According to a 2016 Lightstone report on estate living, it was found that residential properties within estates make up around 15.1 % of the total market value. This is particularly interesting, since residential estates made up only 5.1 % of the total volume of real estate in South Africa. In 2016, the average home price in South Africa was R700 000, with the average home in a gated estate being around the R2 million mark.
Having grown in popularity over the past few years, it’ s clear that estates aren ' t just a passing trend. There are over 7000 freehold and sectional title scheme estates with a total amount of 335 000 properties with a collective value of R800 billion according to Lightstone and demand is picking up. At least one in ten South Africans choose gated communities when making residential property purchases despite a drop in new estate developments. The latest stats from ABSA suggest that residential building activity has contracted for the first quarter, and projections for the rest of 2017 is to remain under pressure in the rest of 2017, which will be the result of the outlook for the economy, household finances, consumer confidence and building confidence.
What makes a good estate?
With a record number of estates around the country, it’ s important to keep our sights on what distinguishes a good estate from a bad one. A well-known benefit of estates is their security benefit as well and lifestyle convenient aspects. Years ago, this may have meant building a wall around a bunch of houses and calling it a day. In today’ s market, however, advances in technology have meant the bar is considerably raised.
As Dr Andrew Golding points out, however, it goes beyond security:“ The trend is towards so-called lifestyle estates which encompass work, live, play and shop, all within a secure environment which provides a sense of community.” It’ s this sense of community that many South Africans are willing to pay a premium for. How this is achieved will differ from one
14 SEPTEMBER 2017 SA Real Estate Investor Magazine