Estate living the next property boom in S.Africa - CNBC Africa

Estate living the next property boom in S.Africa

Southern Africa

by admin 0

A golf course community. PHOTO: Getty Images

“The trend wasn’t that obvious a couple of years ago. It’s a fairly recent thing in the South African property market. There’s also been a very diversified way of developing these estates,” Lightstone analytics director Paul-Roux De Kock told CNBC Africa.

“You get freehold estates where people can build whatever they want, and then you get these pre-developed estates where it’s more a sectional scheme or multiple sectional schemes.”

Today, roughly 85 per cent of properties in gated communities are in security estates and 12 per cent in golf estates.

The rise in gated communities is more than just about security, but the freedom to access shopping centres, schools and clinics all within one’s secluded estate.  

“Security is the main driver but also the feeling, especially the freehold estates, of wide open spaces and country living, and also being able to be close to work [and] not moving totally out of the city to get that rural vibe.”

According to De Kock, the prices in estates have also tracked significantly well with the rest of the residential property market.

Current year on year residential property inflation sits at roughly seven per cent, and 7.5 per cent for estates.

“What is interesting is when we did our top suburbs for the past year, estates dominated. We also looked at splitting it into the top, middle and bottom end. In top end, estates came out quite big,” de Kock explained.

“It means that although estates as a whole track very well with the national index, there are location-specific estates that do very well.”

These location-specific estates include Southdowns Estate in Centurion, which grew at roughly 37 per cent in the last three years.

In the next few years, however, areas between Pretoria and Johannesburg will be significantly populated and in some cases, form new cities.

Rapid urbanisation and traffic are also expected to increase as more people attempt to move closer to the city.

“That’s why developers try to set out a big piece of land and have set rules on how many properties they develop there. In Gauteng, we still actually have an abundance of land if you compare us to a land-locked area like Cape Town. Real estate developers have more options in Gauteng,” said de Kock.