The sale of sectional titles appears to be growing in the percentage of total sales nationally. This is according to data from the Pam Golding Property Group, as well as analytics group Lightstone.
“According to Lightstone data, sectional title units now account for a growing percentage of total sales nationally – rising from an average of 22% of all sales in 2010 to 27.7% of all sales in 2019,” said Dr Andrew Golding, who is the chief executive of the Pam Golding Property Group. “This is despite the large number of new, affordable, predominantly freehold homes which are being developed and sold in cities across South Africa which has been adding steadily to the national stock of freehold homes.”
According to Golding, the popularity of sectional titles have increased over the past 10 years – this is not just because they are more cost-effective, but also because they often offer higher security and are a communal way of living.
“In 2000, 13.5% of all plans completed were for sectional title homes (the total includes homes under 80sqm, namely affordable homes). By 2019 this had risen to 54.9% (although this dropped to 46.1% in the first two months of 2020 – the latest data available). During the third quarter of 2019, sectional title as a percentage of total plans completed peaked at 59.7%,” he said.
Cape Town has the most expensive sectional titles, averaging a price of R1.35-million per property. Those in Pretoria average a cost of R800 ooo, while Johannesburg has an average of R750 000 per sectional title. The median price of sectional title properties found in Cape Town is higher than in other metro markets, and this may be attributed to Johannesburg and Pretoria having a higher number of first-time buyers purchasing sectional title homes than in Cape Town.
“Interestingly, Pretoria has the largest number of sectional title properties, while East London has the lowest,” said Golding. “Cape Town has also registered the strongest growth in market share for sectional title sales over the past decade, from 30.8% of all sales in 2010 to 43.6% in 2020, reflecting an increase of 12.8%. Port Elizabeth has also seen a growing percentage of sectional title sales – 38.4% in 2010 rising to 47.5% in 2020, which is an increase of 9.1%. However, in East London, sectional title sales remain largely unchanged at just over 21% of total unit sales.”