South African property statistics show the market is booming. Despite the effects of the COVID-19 pandemic, mortgage bond applications are at an all-time high. According to First National Bank, 2020 saw the highest volume of mortgage approvals in over ten years.
Attractive market pricing, lower transfer duties, and favourable interest rates are driving demand. This is especially true as the price index edges further downward. In some cases, this makes paying off a mortgage bond more affordable than paying rent to someone else.
Are you looking for your first home, or do you want to up or downscale from your current house? These are the best types of property to buy in South Africa right now.
Freeholding properties
One residential property index shows that freehold prices outperformed other property types during 2020. They ended the year with 2.9% growth overall.
The following types of property are among the top choices available when buying a freehold home in South Africa.
Single-family houses
Recent population studies show that most homes in South Africa are brick and concrete freestanding structures. These vary from modest, affordable one-bedroom homes to huge mansions two or three storeys high. Basic starter homes with small gardens are common and most freestanding homes in South Africa are single-storey.
Some larger properties may also feature a freestanding granny cottage onsite. Many homeowners choose to rent these out to earn some extra income or as extra accommodation for their ageing parents.
Thanks to the 2020 work-from-home trend, some homeowners opt to convert these extra dwellings into home offices instead.
Smallholdings
Smallholdings fall somewhere between houses and farms when it comes to size and lifestyle. Most of these properties include only one or two hectares of land. They may contain a single home or several dwellings. Some homeowners repurpose these as accommodation for labourers. Others rent them out as a source of extra income from holidaymakers or tenants.
Smallholdings are often sold under the banner of lifestyle properties. That’s because they offer opportunities for indulging in outdoor hobbies. Some of the most popular ones are vegetable gardening, equestrian sports, small-scale farming, trail running and off-road cycling tracks.
Smallholdings are a good choice for those who enjoy outdoor living without the exorbitant costs of maintaining a full-scale farm. They’re also located closer to the conveniences of town than traditional farms are.
Farms
Usually, farmers hand their properties down through the generations. However, it’s become more common for retiring farmers to sell their farms nowadays. This is due in part to their children abandoning farming in favour of alternative careers.
Farms in South Africa centre around agriculture as well as tourism. Crop production, livestock rearing, wine manufacturing, and raising game species dominate productivity.
Many farms have more than one dwelling as well as accommodation for labourers and assorted outbuildings. Those in tourist areas like Mpumalanga, the KZN Midlands, and the Cape often have extra chalets or cabins that they rent to holidaymakers. Productive farms fetch high prices, especially in good rainfall areas.
Cluster homes
Cluster homes offer the security of communal living with the added privacy of having your own enclosed garden. Cluster homes sell as freehold properties in South Africa. However, they share some commonalities with sectional title properties. That means you get individual title to your garden and home, but you can still use communal areas in the development.
An elected homeowner’s association deals with the day-to-day maintenance of some aspects. These include roads, verges, and recreation areas. The levy depends on the size of your home, the amenities available in the complex, and where it’s located.
All homeowners in a cluster home development pay a monthly or annual levy toward the cost of maintenance and upkeep. You’ll find these types of homes available in the cities and suburbs or within private golf estates and wildlife conservancies. As such, these properties are often a good choice for those who desire a second home for family holidays, or as an investment property.
When you buy one of these homes, you maintain everything inside your boundary. You also agree to follow the rules and regulations of the homeowner’s association.
Sectional title homes
Sectional title home prices remained flat during 2020, ending the year well below the national average. These property options offer some security features, like controlled access. This makes them a popular choice for young, single female homebuyers.
When you buy a sectional title home, you don’t need to attend to the maintenance of shared spaces. The body corporate takes care of the maintenance and upkeep of all shared areas. You’re still in charge of your own domain, such as interior and infrastructure aspects like painting and repairs.
When choosing a home in a sectional title development, these are your options.
Flats and apartments
You’ll find most high-rise flats and apartments available in South Africa’s larger cities. These include Durban, Johannesburg, and Cape Town.
Smaller towns do have flats available, but these buildings are often smaller, with between two and four storeys.
Many homeowners find a one or two-bedroom flat enough for their needs. You’ll also find a few three or four-bedroom flats, as well as plush penthouses for sale specifically in wealthier urban areas.
Typically, flats include separate bedrooms and bathrooms with open-plan living and dining areas. A bachelor flat, or studio flatlet, is ideally suited for a single person – being smaller, they consist of a single room containing your sleeping, dining, and kitchen area in one, with a private bathroom.
Some apartment buildings include amenities like a swimming pool and gym. Most provide access to secure open-air or covered parking.
Flats also offer easy access to work, leisure, and shopping activities. So, they’re a convenient lock-up-and-go option for upwardly mobile young executives.
Townhouses
Townhouse homes consist of semi-detached duplex or simplex homes. In the case of double-storey buildings, the lower home often has garden access.
Like flats, they may have several separate bedrooms or a studio layout. Townhouse homes offer security in numbers and often also have controlled access to ensure extra safety and security.
Security Complexes
Security complexes are one of the fastest-growing sectors of the housing market in South Africa. They may consist of townhouse-style homes, free-standing dwellings, apartments, or a mix of these. Apart from controlled access and secure perimeter fencing, these developments also offer a sense of community for residents.
Many of them feature regular organised activities and outings and some have high-end amenities to enjoy communally too. These may include swimming pools, lounges, braai facilities, tennis, and squash courts, and more.
Property market in 2020/21
Thanks to the current buyer’s market, many sellers are willing to negotiate. It’s not uncommon to buy homes below the list price in South Africa. Around 95% of homes in South Africa sell below the listed price.
Location is one of the most important considerations when investing in South African property. According to analytics firm, Lightstone, Johannesburg fared the best in property sales during 2020. The following suburbs achieved the most sales:
- Drieziek
- Midstream Estate
- Morningside
- Parklands
- Bryanston
These areas cater to vastly different demographics, showing that sales are widespread across the population.
First-time female buyers continue to dominate the property market. During 2020, these buyers completed over 26,734 house sales.
Outside of Gauteng, other major trends include a shift toward more natural places. Sales are booming in areas like the wine estates of the Western Cape, the Kwa-Zulu Natal coast, and the Garden Route.
Lightstone also reveals that the Western Cape is still a popular choice for prospective homebuyers. However, sales in this region declined for the first time during 2020, while Kwa-Zulu Natal saw a 4% increase in the number of transfers concluded.
While South Africans are heading out of the city, foreign investors seem to prefer properties on Cape Town’s Atlantic Seaboard. Some of the most popular areas include Camps Bay and Sea Point. Spurred on by flagging local currency, these wealthy folks continue to pay high prices for these sought-after seafront homes.
Protecting your biggest asset
Don’t leave home insurance out of your budget when buying a property. A comprehensive plan protects your assets so you can enjoy total peace of mind in your new home, whether it’s an investment property or a place where you’ll live day to day.
Get your free insurance quote today with Auto & General Insurance to discover how much you’ll pay to cover your dream home in South Africa.
Disclaimer: This content is for informational, educational, or entertainment purposes only. We do not make any warranties about the completeness, reliability, and accuracy of the content.
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