SA Affordable Housing January - February 2019 // Issue: 74 | Page 22

FEATURES
Affordable homes
driving property growth
Homes in traditionally affluent areas are no longer driving property growth
in South Africa, with sectional title proving to be increasingly popular.
Compiled by Warren Robertson
Homes in traditionally affluent areas are no longer driving property growth in South Africa.
P
am Golding Property Group chief executive Andrew
Golding, says the percentage of freehold property
transactions had declined nationally from almost 90%
of all sales in 2003 to 67% this year, with the percentage of
sectional title property transaction increased from 18% of
total transactions in 2003 to 22% in 2018.
He explains that while property is still growing well in the
Western Cape, it is KwaZulu-Natal and Gauteng where South
Africa’s engine room of property growth is now.
“Sectional title property transactions in KwaZulu-Natal
accounted for between 16% and 20% of total transactions
in 2018, with no discernible trend,” he says and adds,
“KwaZulu-Natal’s house price inflation was at 4.27% and
Gauteng’s at 2.83%.”
Golding says Amanzimtoti last year replaced Umhlanga as
the most popular sectional title offering in KwaZulu-Natal
and adds that in 2018 78% of all transactions in
Amanzimtoti were sectional title properties compared to
71% in 2003 while the percentage of sectional title
properties in Umhlanga dropped to 61% of total sales last
year from 78% in 2003.
Golding adds that KwaZulu-Natal is witnessing an influx
of investors seeking property to let.
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JANUARY - FEBRUARY 2019
Sectional title property transactions in
KwaZulu-Natal accounted for between
16% and 20% of total transactions.
He says that Durban is a great buy-to-let market because
acquisition costs were low enough to make yields and
gearing attractive while Umhlanga is also popular because
both yields and capital appreciation are strong.
This trend is however offset by a decrease in demand for
‘township’ properties according to property economist
Professor Francois Viruly, who explains this sector lags
behind the rest of the market.
He says that one of the major problems with townships is
that this sector is still in the ‘shadows’. It’s not reflected
anywhere in the usual weekend newspaper property
sections, giving the impression that the South African
property market is flooded with properties over R500 000,
which is simply not the case.
“The irony is that 60% of property in South Africa is
under R500 000 so 50% of the market is not being
reflected. So it’s a market but it’s not a transparent one.”
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