Demand for sectional title property grows as youngsters embrace lock-up-and-go lifestyle

A predominantly young and rapidly urbanising population is contributing towards growing demand for sectional title residential properties in South Africa, particularly in the major metropolitan areas and key commercial hubs.

This is according to Andrew Golding, CEO of Pam Golding Property group.

“Encouragingly, developers are responding to the demand for sectional title living, with the percentage of flats and town houses rising from just under 26% of total residential building plans passed in 2010 to 47% in 2022, after a brief dip in the early years of Covid.

“For young buyers and other first-time home purchasers, smaller properties are appealing because they are more affordable, but increasingly the demand for sectional title is also being driven by lifestyle choices, as younger generations typically prefer secure, lock-up-and-go properties.”

Golding said this is reinforced by a new trend of shared spaces, with micro private units in developments with co-working and co-living areas.

“Not only does this make property ownership more affordable, but it also creates a sense of community which has been lost to a large degree in traditional suburban areas amid security concerns.”

Golding said while the pandemic and ensuing lockdowns temporarily reversed the shift to sectional title homes — as the freedom to work from home prompted many to purchase freehold homes in peripheral suburbs and holiday or retirement towns — the longer-term trend to sectional title residences has since reasserted itself.

“A contributory factor towards the shift to sectional title homes is the availability of surplus office space in business nodes in the post-Covid era, thereby providing new opportunities for conveniently located residential developments.”

Golding said while the choice between freehold and sectional title is often dictated by life stage, such as a preference for a suburban freehold home while raising a family, or, conversely, “empty-nesters” downscaling or planning for retirement, there appears to be an underlying shift across generations towards low-maintenance, sectional title living, given security and cost considerations.

“This trend is most evident in the growing proportion of sectional title homes in new unit sales. In 2010, 20.5% of all new homes sold in South Africa were sectional title. By the first quarter of 2022, this had risen to 36.1% (latest available Lightstone statistics) of all new homes sold.

“However, South African housing stock still remains predominantly freehold and, according to Lightstone, there are approximately seven million residential properties in South Africa, of which 80.4% are freehold, while just 12.4% are sectional title properties. Estates account for the balance of 7.2%.”

He said while all major regions have experienced a shift towards sectional title properties over the past 12 years, the change has been the most pronounced in KwaZulu-Natal, “which has a historical bias towards sectional title living, particularly as much of the development is along the coast, where land is scarce and more expensive.” 

TimesLIVE